Lenoir Calls for Property Tax Cut Beyond New Certified Tax Rate From Reappraisal

By Bill Dries

Shelby County Trustee David Lenoir says there should be a cut in the county property tax rate beyond the new certified property tax rate to be set as a result of the 2017 countywide property reappraisal.

“For me, the trifecta would be a real tax cut to the property owners of Shelby County. If we don’t get that, personally I’m going to be disappointed. Professionally I’m going to be disappointed,” Lenoir said on the WKNO/Channel 10 program “Behind The Headlines.”

Lenior was part of a discussion on the countywide 2017 property reappraisal and is a candidate for Shelby County mayor in the 2018 elections.


“I would prefer instead of taking a revenue-based approach to budgeting – how much money do we have to spend and how can we go spend it – I’d rather take an expense-based approach to budgeting,” Lenoir said.

Lenior is not alone in that sentiment. Shelby County Commissioner David Reaves has been vocal in calling for a property tax cut. County Commission budget committee chairman Steve Basar has also said the commission will look at a property tax cut as part of its budget deliberations and he will be among those pushing for it.

“It won’t be anything heroic,” he said of the degree of tax cut he anticipates being proposed.

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

Residential property values in the latest Shelby County reappraisal for tax purposes are now moving closer to a 13 percent increase than 10 percent, according to Shelby County Property Assessor Cheyenne Johnson.

She anticipates an even larger 20 percent increase in commercial assessments, which take into account sales over the last two to three years. The increases in residential and commercial come after a rare drop in the last reappraisal in 2013 that reflected the worst national economic downturn since the Great Depression.


Residential property accounts for approximately 300,000 of the 350,000 parcels being reappraised countywide.

“The downfall in the real estate market actually started at the end of 2008,” Johnson said. “When we released the 2009 reappraisal notices, those numbers were really up in value. Therefore in some cases, people are actually looking at reductions from 2009 and it stayed there through the 2013 reappraisal. “Now we are really looking at a situation where a home value may have increased $30,000, $40,000 when it actually is a reflection back to 2009.”

A reappraisal must look at sales back in time instead of looking at present values.

“2009, the reappraisal year, captured some of the upswing that had occurred in real estate. But when you looked outside the window the recession had already occurred,” Lenoir said. “So when I came in in 2010, we had a significant number of appeals pending where people had paid their minimum tax and were getting a refund because the real estate recession had already occurred.”

The county property tax rate is currently at $4.37 per $100 of assessed value at a rate of 25 percent for residential property and 40 percent for commercial property. The city of Memphis property tax rate is $3.40

By state law, the reappraisal of property values for taxation purposes cannot result in a revenue windfall for local governments.

That means if property values go up in a reappraisal, as they are expected to with the 2017 reappraisal, the property tax rates must go down in a new re-certified rate because that new rate must produce the same amount of revenue.

But the new certified property tax rate reflects a broader look, while in some areas of the city the reappraisals have gone up by 25 to 30 percent from four years ago.

“These averages are just averages. And you know different neighborhoods are going to experience highs and lows and we also have different mixes of commercial and residential,” city chief financial officer Brian Collins said. “So when you talk about these averages they can be very deceiving. … It’s net neutral to the governing body. But what it means to the city, I think, is that generally speaking we have prosperity.”

Johnson acknowledges some “sticker shock” from homeowners.

“When we go through the Midtown area, we really did see a significant increase. It’s difficult sometimes to tell exactly what happened on the inside of that house,” she said. “We ride by. We look for little signs that give us some indication that maybe that house has been renovated. We don’t do an interior inspection until you call the office and you ask for an adjustment. Those individuals may have a serious concern.”

Lenoir called for tax relief of some kind in 2015 when he specifically questioned whether the county’s wheel tax should be reduced or eliminated. The wheel tax has since been devoted entirely to funding local public education.


Lenoir is calling now for a change in the approach to funding government from the Shelby County Commission and the Memphis City Council.

“And it seems like there is this mindset of, ‘Tell me how much money we have to spend,’” he said. “‘Give me a revenue forecast of how much we have to spend and we’ll go forth and spend it.’ Personally, I think that is the wrong approach.”

Lenoir and Collins are trying to estimate how much the revenue that comes in will line up with how much revenue is supposed to be generated by the new certified property tax rates, which are set before the revenue starts coming in.

“It’s like a three-dimensional moving target. … I always get the question, ‘what is tax rate going to be?’ and I’m going to have to make a calculation ahead of time that assumes a lot of things,” Collins said. “It doesn’t really help us to be wrong, let me tell you. We want to get it as right as we possibly can because what that number is, really has implications for the discussion during the budget process. It’s not only frustrating for the administration but also the members of the city council and the county commission.”