Lenoir: ‘Is It Time for a Tax Decrease?’

By Bill Dries

Shelby County Trustee David Lenoir says the $22 million extra in property tax revenue his office collected during the past fiscal year appears to be a trend of improving health in the local economy.


And it raises questions about whether better tax collections because of prosperity should translate to some kind of tax decrease.

“At some point in time we have to answer the question: ‘Is it time for a tax decrease?’” Lenoir said of the WKNO TV program “Behind The Headlines.” “I think we have to look and see where we want to provide that tax decrease.

“If we want to help the poor in our community, I think we have to look at the wheel tax,” he said. “If we want to look at the business community, I think we have to look at the (personal property) tax which is on businesses. If we want to assist property owner and investors then we have to look at the property tax – or a combination of all of the above.”

“Behind The Headlines” is hosted by Eric Barnes, publisher of The Daily News.

Lenoir said the increased tax revenue appears to be a trend.

“I don’t know about the revenue number growing,” he said. “But I will say it does appear as if the financial health of Shelby County is improving when you look at the number of investments that are being made by the private sector.”

He cited the renewal of Overton Square and Crosstown Concourse as well as the construction of the $90 million Guest House at Graceland resort hotel and rising residential and commercial real estate sales.

Shelby County government’s budget season that ended in July with the start of the new fiscal year featured a lively debate among county commissioners about a proposed reduction in the county property tax rate with a forecast of a $6 million budget surplus.


Ultimately there weren’t seven votes for that. But the debate was revived among commissioners with Lenoir’s final numbers on the fiscal year that were $16 million more.

“I don’t think the commission is opposed to a tax rate decrease,” said commissioner Van Turner. “But it has to be a trend. Trends are not determined by one year. I think we have to really look at a couple of years to make sure this is in fact a trend.”

County chief administrative officer Harvey Kennedy said the $22 million is not extra funding without a use.


The largest portion – 45 percent – goes to partially fund the operating costs of the county’s seven public school systems. The extra property tax revenue will be substituted for revenue from the county wheel tax that was going to fund the operating budgets of the school systems. And the wheel tax revenue will in turn then go to fund the county’s debt of $1.2 million – the vast majority of that debt being from school construction and other schools capital projects.

And Kennedy said Shelby County Mayor Mark Luttrell sees “a lot of needs.”

“Blight is an area that the mayor has constantly asked us to find ways to deal with,” he said. There are about 6,000 blighted properties in the Shelby County Land Bank, taken for delinquent taxes, that the county maintains.

“We know the schools are probably going to have an increased need,” he said. “And we don’t know what’s going to happen with Regional One – whether their lost subsidies because of the changes in health care is going to generate a requirement. There’s just a lot of unknowns out there.”

The loss of federal subsidies to the county’s safety-net public hospital could run as high as $70 million under the worst case scenario.

Lenoir’s office administers the wheel tax rebate program for senior citizens. He estimates nine out of 10 senior citizens his office deals with believe the wheel tax was supposed to be temporary.

“That was my understanding,” he said.

“I think phasing out the wheel tax strategically over time with a goal of eventually sort of weaning ourselves off that wheel tax – I think would send a positive message throughout the entire community,” Lenoir said. “Keep in mind that wheel tax is only paid by Shelby County residents.”

Lenoir added that a phase-out would depend on economic and tax collection trends continuing.

Kennedy said the administration isn’t necessarily opposed but that the wheel tax is “an important source of revenue.

“We’re a conservative administration,” he said. “We’d like to reduce taxation of the citizens as much as we can. But the practical problem is that’s a $30 million source of revenue and we’ve used it to balance the budget for schools operations and schools debt. Something has to substitute for it or you’ve got to find $30 million worth of reductions in spending.”