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VOL. 131 | NO. 52 | Monday, March 14, 2016

Politics of Deannexation Proposal Grows More Complex

By Bill Dries

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Memphis Mayor Jim Strickland is heading to Nashville Wednesday, March 16, to talk with legislators about what he considers City Hall’s highest priority in the 2016 session of the Tennessee Legislature – defeating a deannexation proposal.

The proposal made it to the top of the city’s list in the capital last week as Strickland’s administration took a closer look at a proposal that has been amended several times to go beyond a possible deannexation of the south Cordova and Southwind areas – the two most recent annexations by Memphis.

Strickland has some willingness to talk compromise although he is not saying specifically that he could back a bill that allowed just the undoing of the south Cordova and Southwind annexations.

“I am very open to talking about a smaller footprint for the city of Memphis, but we have to do it collaboratively,” he said last week. “And we do not need to create a fiscal crisis in the process. And that’s why we oppose this bill.”

Strickland cites the proposal’s estimated impact of an $80 million loss in city revenues – $63.8 million in property tax revenue and another $15.3 million in sales tax revenue – as well as the potential loss of 111,228 residents from 18 areas annexed by Memphis since the late 1990s. On the other hand, those in deannexed areas would still pay taxes on their proportionate share of the city’s debt from the time they were part of the city. That’s what Lt. Gov. and Senate Speaker Ron Ramsey said last week.

With a House floor vote possible Monday and Senate action tentatively slated sometime in late April, the issue is rapidly becoming more complex.

It took little time last week for the deannexation bill to be joined in the spotlight by a counter move to negate it – consolidation of Memphis and Shelby County governments.

Strickland is downplaying the possibility of a move toward local government consolidation as a response to a deannexation bill.

“I’m for consolidation, but I really don’t want to get to that point this way,” Strickland said. “I’m really hoping that this bill fails and we don’t have to get to those discussions because our community does not need the turmoil that this bill and the resulting debate would have.”

But Strickland is being accused of “fear mongering” from several fronts including Shelby County Commissioner David Reaves.

And the deannexation bill has support from five Shelby County legislators.

The bill is sponsored by Republicans Bo Watson in the Senate and Mike Carter in the House, both representing Hamilton County.

And the bill has added sponsors from Shelby County – Republicans Steve McManus, Ron Lollar and Mark White in the House and Republican Brian Kelsey and Democrat Reginald Tate in the Senate.

Strickland said the bill has been amended from its original version that targeted the south Cordova and Southwind annexations to a broader array of 18 annexations by the city since the late 1990s. Some were very small and specific annexations aimed at commercial real estate, including a FedEx site adjoining Southwind that came into the city in 1998 and a Wal-Mart bordering Hickory Hill taken into the city in August 1999, eight months after Hickory Hill became part of Memphis. There is also the larger southeast industrial corridor area annexed in 2003 that is south of the Hickory Hill annexation area and goes to the Mississippi state line.

The administration believes 10 of the 18 areas could move to put deannexation questions on the ballot.

The basic bill eliminates the requirement that an area can only be deannexed starting with an ordinance approved by a city council or county commission. It would allow a group of citizens equal to at least 10 percent of those who voted countywide in the last general election for Tennessee governor to petition for a referendum to deannex an area annexed after May 1 of 1998. The referendum would be among “qualified voters,” meaning those who live in the area to be deannexed.

Strickland said the legislation originally affected eight counties across the state and now affects five.

Backers of the bill counter that the city would save money from not having to provide city services to the annexed areas.

Strickland says there would be some savings to the city, but not enough to be at least a wash with what the city loses in revenue.

“We don’t fully know the answer. But based on the research we’ve done to date, it won’t be anything close to the loss of tax revenue,” he said.

The result, Strickland added, would be that the city’s property tax rate would “almost certainly go up.” And the county property tax rate could, too, as county government provides services to what would become unincorporated areas of Shelby County.

“When this city and this region so desperately need good jobs, this will seriously impair our capability for economic development,” he said. “This would affect our entire region.”

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 23 23 1,365
MORTGAGES 21 21 1,068
FORECLOSURE NOTICES 6 6 196
BUILDING PERMITS 117 117 3,173
BANKRUPTCIES 42 42 795
BUSINESS LICENSES 2 2 331
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0