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VOL. 128 | NO. 196 | Tuesday, October 8, 2013

Flinn, Whalum Differ on Sales Tax Hike Ballot Question

By Bill Dries

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To Memphis City Council member Shea Flinn, the only uncertainty about the proposed citywide half-cent sales tax hike on the Nov. 21 ballot is the outcome of the vote.

To former Shelby County Schools board member Rev. Kenneth Whalum, nothing in the ballot question comes close to assuring the money will cover prekindergarten expansion costs the tax is supposed to guarantee.

“It guarantees everyone who is not currently already receiving (prekindergarten),” Flinn said on the WKNO-TV program “Behind the Headlines.” “The only limit to this is going to be the amount of money collected. … We didn’t want to get into a wheel tax situation.”

Whalum said that is precisely where the minds of voters will go – the county tax sold in the 1980s as funding for school construction and expansion that also went to road projects and that remains on license tag renewal forms to this day.

Whalum’s first point made against the sales tax hike was a familiar one – the $57 million the city of Memphis owes Shelby County Schools from a Chancery Court decision.

“The average voter in Memphis is going to say, ‘Didn’t the court order you to pay $57 million for my children? And you didn’t pay it,’” he said. “So the average voter is going to say, ‘Well, you already have $57 million. Why don’t you just use the $57 million to provide pre-K?’ I’d be willing to go with that. It’s a matter of common sense.”

The program, hosted by Eric Barnes, publisher of The Daily News, can be seen on The Daily News Video page, video.memphisdailynews.com.

Flinn said the $57 million is tied up in a city of Memphis counterclaim that Whalum continues to dispute exists. But even without that ongoing dispute, Flinn argued the prekindergarten expansion made possible by the sales tax hike isn’t a school system program. It, as well as the revenue from the sales tax hike, would be administered by an early childhood or prekindergarten commission.

Memphis Mayor A C Wharton Jr. recently appointed the members to the commission, and those nominees are awaiting approval by the city council.

“The reality is it has to have a dedicated revenue stream. It can’t be one-time money,” Flinn said. “The only way to pay for it is through this tax increase.”

Whalum said he could support the sales tax hike if all $47 million of the estimated revenue generated by the half-percent increase went to a prekindergarten expansion.

The text of the question on the ballot in Memphis on the Nov. 21 election day reads that the revenue from the tax hike is held by the commission “until appropriated, and then shall only be used to fund a prekindergarten program to be governed by the Pre-K Commission, with all excess funds paid to city government by June 30 of each year to be used by city government solely to reduce the ad valorem property tax rate.”

“The reality was when we started, this $23 million would have covered everyone,” Flinn said of the cost of a prekindergarten expansion. “It has since gone up. … We fully expect the pre-K commission to expand the program. It will use that money up very quickly. But we had to tell the public where the overage is going to go.”

Flinn said it is unlikely the City Council would move to lower the city property tax rate with the overage from the first year of collection of the sales tax hike.

Whalum said the sales tax is regressive and affects the “poorest of the poor to pay more in sales taxes to finally come around and decrease property taxes, which poor people don’t pay.”

Flinn said because the poor often rent, they not only pay property taxes passed through on their monthly rent, they pay that pass-through at a higher rate because of the higher percentage of the property tax on commercial properties.

Dr. Hank Herrod of the Urban Child Institute estimates 8,000 to 9,000 children who don’t currently have access to prekindergarten could be eligible with the expansion. He said the debate on how to fund such an expansion, apart from agreement on the need for the service, is spotlighting the broader issue.

“Ten or 15 years ago, we didn’t talk about (kindergarten). We talked about elementary school and high school. (Kindergarten) is in place now,” he said. “If we can get pre-K in place … we need to start doing some things that support those families from an educational enrichment perspective who don’t have the means internally to help their kids. That’s where you are going to get the biggest bang for your buck.”

PROPERTY SALES 69 357 17,741
MORTGAGES 66 403 20,438
BUILDING PERMITS 208 696 36,641
BANKRUPTCIES 52 210 11,374