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VOL. 132 | NO. 142 | Wednesday, July 19, 2017

Political Differences Endure After $4.11 Shelby County Tax Rate Compromise

By Bill Dries

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County commissioner Heidi Shafer, who proposed a property tax rate cut from $4.13 to $4.10, said the compromise at $4.11 was “inelegant,” but the results are still positive. (Daily News File/Houston Cofield)

Shelby County commissioners were still calculating Monday, July 17, after they passed a compromised, $4.11 county property tax rate that appears will stay put long enough for the commission to take a final vote Wednesday at a special meeting.

If that is the case, Wednesday will bring down the curtain on the county’s budget season.

But it probably won’t end the debate about some larger issues that came up on the path to the tax rate compromise.

“In 2019, there is going to be a plethora of money floating around in government,” commissioner Eddie Jones said after Monday’s decisions. “A tax cut down to what we did was more than justified.”

Commissioners had been split between a $4.13 rate that was the certified tax rate calculated to produce the same amount of revenue as the current tax rate of $4.37 taking into account the increase in property values from the 2017 countywide property reappraisal, and $4.10, which would have eliminated the 3 cents of the rate that Shelby County Mayor Mark Luttrell wanted to devote to a pay-as-you-go fund for smaller capital projects.

Luttrell had hoped to salvage some tax rate revenue for the pay-as-you-go fund even if it was a penny on the tax rate.

But the compromise killed that, with commissioner Terry Roland proposing to devote what amounts to a penny to increase the 2 percent across-the-board pay raise the commission had earlier approved for county employees to 3 percent in the $1.2 billion county budget.

The commission approved that, setting the stage for a separate action that cut the other two cents from the tax rate.

Commissioner Walter Bailey stood his ground, remaining against any tax-rate cut and posting one of two “no” votes on the $4.11 compromise. (Daily News File/Houston Cofield)

“Think about the fact that there are homes that appreciated a significant amount and some that didn’t appreciate at all,” commissioner David Reaves said as he quarreled with Jones’ use of the term windfall.

“I don’t know if it’s really a windfall per se,” Reaves said. “A lot of them – an appeal didn’t net anything for them. I think it’s kind of a shift.”

The compromise tax rate was approved by the commission on an 11-2 vote, with commissioners Walter Bailey and Justin Ford voting no. Bailey contended there should be no tax cut. Ford favored a $4.10 rate.

“This was an old-fashioned horse trading situation all done on the record,” said commissioner Heidi Shafer, who originally proposed the $4.10 property tax rate. “It’s very inelegant, but what we came out with was something where everyone can win.”

There were moments when there seemed to be a question about how much fight was left for the two positions. Those questions quickly evaporated when Reaves called for a vote on the $4.10 rate after Ford had declared he favored that or nothing. If all six Republican commissioners voted for the rate, Ford would have been the seventh vote necessary for passage.

That’s when Roland’s amendment for $4.11 was resurrected as an amendment by Democrats on the commission.

Reaves made an appeal to Democrats to “come to the middle.”

“That is the No. 1 thing in the suburbs,” he said of the move to deliver a property tax cut. “We need some Democrats to come to the middle of this.”

“I can understand the tax cut,” said Democratic commissioner Van Turner. “We’ve had a surplus for at least two years. … The 2-percent cut almost right sizes what individuals would have to pay for property taxes. It sort of makes it neutral for them.”

Shafer said the compromise showed the commission can “walk and chew gum at the same time.”

“It’s not easy to compromise,” she added.

Commissioner Reginald Milton, who was on the other side of the compromise from Shafer said the two factions, met in the middle.

“I don’t think anyone got exactly what they wanted,” he said.

The commission also approved Monday a $905,000 grant to the Boys & Girls Club of Greater Memphis to open two centers at Dunbar Elementary and Craigmont High schools.

Commissioners had voted down county funding for three of the school centers earlier in the month with the understanding that Shelby County Schools would fund them.

But Friday, the school system said it was legally barred from using its direct budget revenue for anything other than school system K-12 programs.

That is where some of the more enduring philosophical and political differences among commissioners became evident.

Reaves questioned why commissioners couldn’t come up with the funding through their increased individual allocations of grant funds. Others pushed for the city of Memphis to put up half of the funding to match any county money.

“The need far outweighs the dollars,” Bailey countered, arguing that city residents also pay county taxes. “What you have here is that the city taxpayers pay twice.”

“If you live in any of the suburban cities, you pay twice,” Roland replied. “Don’t think you have cornered the market on paying taxes.”

Commissioner George Chism argued that he and Republican commissioners from the suburbs find themselves pushing and pushed politically in such matters.

“I know the people that elected me, elected me to not give away their money,” he said of the Boys & Girls Club funding. “So I push that envelope and make the argument.”

Chism was one of the four no votes on the funding.

All told, the administration will be using approximately $2.7 million from the county fund balance, or reserves, to balance the general fund budget, including the percentage point added to the county pay raise and funding for the Boys & Girls Club centers, according to county chief administrative officer Harvey Kennedy.

That compares to $7.8 million used from county reserves to balance the budget for the fiscal year that ended June 30.

PROPERTY SALES 61 61 6,453
MORTGAGES 46 46 4,081
BUILDING PERMITS 113 113 15,474
BANKRUPTCIES 19 19 3,289