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VOL. 129 | NO. 118 | Wednesday, June 18, 2014

County Budget Season Not Over Yet

By Bill Dries

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The Shelby County Commission defeated two competing versions of the county property tax rate for the new fiscal year on the second of three readings Monday, June 16.

Shelby County Commissioners made some decisions Monday toward ending the county budget season. But they still have some to work to do on a county property tax rate.

(Daily News File/Andrew J. Breig)

But they both advance to third and final readings when the commission meets in July.

The votes on second reading come two weeks after the commission approved both versions of the tax rate on first reading.

“If you are for the first version, you might not want to vote for the second version,” commission Chairman James Harvey said at the outset of the two votes Monday.

One version, proposed by Shelby County Mayor Mark Luttrell, would lower the current $4.38 property tax rate by a cent. It would also eliminate the 4 cents extra on the tax rate for property owners outside the city of Memphis who have been paying off rural school bonds used to finance the construction of Arlington High School.

Luttrell proposes paying the debt using sales tax revenue from unincorporated areas of Shelby County instead of the 4 cents extra on the property tax rate.

The second version, proposed by Commissioner Steve Mulroy, would keep the 4 cents in place to pay the Arlington High debt. If it prevails, Mulroy intends to propose the sales tax revenue from unincorporated Shelby County, estimated at $2.8 million, be used for prekindergarten funding.

In the past, the proposal has been referred to as an expansion of prekindergarten classrooms.

But Shelby County Schools superintendent Dorsey Hopson said the additional funding would maintain the prekindergarten classrooms the system had in the academic year that ended last month.

Hopson also pledged that if the commission approves the additional funding for prekindergarten, the school system will use the funding exclusively for prekindergarten without the need for an outside agency to administer the funds. He also pledged that the funding would not trigger a maintenance-of-effort obligation in which county government would be required by state law to provide the funding indefinitely.

Setting a property tax rate after the July 1 start of the fiscal year is not unprecedented.

Last year, the commission approved the current $4.38 tax rate, which included a 36-cent increase, on July 22. Of that increase, 30 cents was an adjustment from a reappraisal in which property values went down, while the remaining 6 cents was a property tax hike.

Meanwhile, the commission approved Monday the school system’s budget for the new fiscal year that begins July 1 without the additional prekindergarten funding.

The commission also rejected a proposal for a $1.8 million facilities study of Shelby County Schools and the six suburban school systems to be supervised by the county administration.

“I don’t think it’s appropriate for Shelby County’s administration to be doing this work for the schools – any schools,” said Commissioner Mike Ritz, who also termed the proposal “overreaching and paternalistic” as well as “a little bit of big brotherism.”

The building evaluation for the suburban school systems would have been optional, said county Chief Administrative Officer Harvey Kennedy. “We thought this was a cleaner, quicker way,” he said.

Commissioner Heidi Shafer, who proposed the study, said it offered an “apples to apples” comparison of facilities across all seven systems.

She said opposition to that represented a “myopic stance.”

“We’re the train depot here,” she said of the county’s role in funding all seven systems. “They are all our school systems.”

With county government’s operating and capital budgets approved at the commission’s June 2 meeting and final votes on the property tax set for the first meeting in July, commissioners have several other pieces of unfinished business they will take up at a special meeting tentatively set for June 26, specifically to decide those issues before the new fiscal year.

The items include a vote delayed Monday on a $3 million contract for the University of Tennessee Health Science Center to operate the West Tennessee Regional Forensics Center beginning July 1.

Commissioner Sidney Chism also added $50,000 in new fiscal-year grant funding for MAP-South Inc., a nonprofit community service organization, which is on the special meeting agenda.

And the commission will take up a proposed disparity study costing up to $250,000 and covering five years of data to document the share of county contracts and other business that goes to minority-owned businesses.

Commissioners couldn’t reach a consensus Monday on whether they or the administration would hire the firm to do the study.

Ritz suggested the study should pay particular attention to electrical contractors, car sales contracts, elevator maintenance and low-voltage wiring work – areas he said have shown “little –maybe zero – minority involvement.”

PROPERTY SALES 124 481 17,865
MORTGAGES 127 530 20,565
BUILDING PERMITS 195 891 36,836
BANKRUPTCIES 52 262 11,426