VOL. 7 | NO. 22 | Saturday, May 24, 2014
Editorial: Economic Success Hinges on PILOT Restructuring
The Greater Memphis Chamber is once again venturing into political waters and taking stands on issues like the proposed move of city employees to a defined contributions pension plan.
Time will tell whether this is a sustained move by the business community to become part of the political dialogue in a city that has some important decisions to make.
Past chamber efforts have been intermittent, in part, because the chamber receives some of its funding from city and county governments. The funding requests pass through the Memphis City Council and Shelby County Commission.
And both bodies have not been shy about letting chamber leaders know that when they don’t agree with stands the chamber has taken and that their disapproval could be expressed by cutting funding. In some cases, the funding has even come with conditions that the money cannot be used to pursue a political goal.
The chamber should be better prepared for this than in the past. The broad goals the chamber has outlined thus far are not for the timid or the unprepared. They deserve strong advocacy to yield the kind of discussion the issues deserve.
So the long-held aversion business leaders have to differences of opinion must be adapted to keep the chamber’s voice strong in the discussion. Those who believe the chamber has no place in these discussions will be looking for that aversion to kick in early. They will count on business leaders to immediately begin to fret and sweat about someone outside the city limits witnessing a spirited disagreement in Memphis and deciding to never so much as glance in our direction again.
Business and politics rarely mix well. But the city’s political climate has become much too insular because of the unease the business community readily exhibits about becoming part of political causes and issues. It is time for that to end and business leaders to get involved beyond writing checks to the candidates they don’t want to be on the wrong side of.
As for the coexistence of the chamber with the Economic Development Growth Engine, or EDGE, we continue to believe EDGE’s immediate contribution should be a profound restructuring of the economic incentives, namely payment-in-lieu-of-taxes (PILOT) programs that are the key component of our economic development strategy.
The approach of totaling how much in city and county property taxes are currently involved in PILOT agreements and then setting aside that amount or a lesser amount and leaving that as a pool to draw from still makes more sense to us.
We applaud EDGE’s move to create incentives on a scale that work for smaller businesses.
But it is time to bring down the machinery of PILOTs.
From working out a dollar figure the tax base can live without, it’s then a matter of finding the best way to use the incentives while remaining competitive and accountable.