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VOL. 133 | NO. 83 | Wednesday, April 25, 2018

Strickland Proposes City Property Tax Rate Change After Windfall

By Bill Dries

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JIM STRICKLAND 

Memphis Mayor Jim Strickland is proposing a change in the city property tax rate from the current $3.27 to a $3.19 rate as part of his third budget proposal.

The lower rate is to compensate for the surplus city and county governments have projected for the June 30 end of the current fiscal year because of a lower number of appeals of reappraisal values on property countywide last year.

The state approved certified tax rate of $3.27 was proposed by Strickland and approved by the Memphis City Council a year ago on the basis that it would produce the same amount of revenue as the previous tax rate taking into account the 2017 reappraisal of property by the Shelby County Assessor’s office.

The reappraisal is done every four years and by state law must produce the same amount of revenue as the pre-reappraisal tax rate produced.

“We expected a normal number of appeals of those valuations,” Strickland said in his annual budget address Tuesday, April 24, to the council. “But now that those numbers have come in, we’ve learned that the appeals were way below normal.”

Strickland said he considered several options including keeping the $3.27 property tax rate and the $8 million in new revenue it represents.

“Population loss remains our number one challenge and I believe that our tax rate, which is easily the highest in the state, is a reason why,” Strickland said. “So I’ve made a decision not to propose a tax increase and to continue to run the most efficient government we can possibly run.”

The council will set the city property tax rate as it approves and possibly amends the operating and capital budget proposals Strickland submitted Tuesday.

Strickland’s $685.3 million operating budget proposal anticipates revenue growth of $10.1 million, not counting the $8 million windfall from the $3.27 city property tax rate.

Strickland is proposing $2.4 million of the revenue growth in the new fiscal year for the city’s pension fund to meet the city’s annual required contribution. Another $1.8 million is for promotional testing in the police and fire departments. And $1. 5 million would go toward either two large police recruit classes or three mid-sized police recruit classes. And there would be an additional $1.3 million in funding for parks programming.

Strickland is not proposing any across the board pay hikes for city employees despite a call by the police and fire union for pay raises. Both unions are also mounting a petition drive to put a ballot question to city voters this year to increase the city sales tax by half a cent with revenue going to such a pay raise.

Strickland is instead proposing $1.4 million for targeted pay raises based on a market study.

The capital budget – one time spending for construction and similar projects usually funded by bonds – totals $85.6 million. The budget includes $19 million in funding for street paving.

City council budget committee chairman Edmund Ford Jr. says his goal in budget hearings that begin next month is to have final votes on the budgets and tax rates at the June 5 council meeting.

The property tax rate windfall from the 2017 reappraisal is an issue Shelby County government will also deal with during its budget season.

Shelby County Mayor Mark Luttrell is scheduled to deliver his budget proposal to Shelby County commissioners in May 9 committee sessions.

Luttrell estimates the county will have an $18 million to $25 million surplus at the end of the current fiscal year because of the lower number of property value appeals than expected. Several commissioners have said they will propose a new lower tax rate than the current $4.11 county property tax rate.

Meanwhile, the council approved on the second of three readings Tuesday a Crosstown historic overlay district similar to the Cooper-Young district it approved two weeks ago.

Council member Kemp Conrad moved and the council approved pulling the approval of the Cooper-Young district off the minutes of the last council meeting at least until June.

Conrad is shaping an ordinance that he said would better define “black holes” in the Cooper-Young standards for what can be built and where it can be built.

Exterior work on an existing house or building – the principal structure visible from that street -- that brings specific design review standards into play would go to the Landmarks Commission. But what are termed “minor alterations” would only require the approval of the Landmarks Commission staff. If the staff denies approval, the property owner could appeal to the Landmarks Commission.

Critics of the move by the council to add more specific terms and standards to the process said Tuesday they think Conrad’s still-forming proposal may violate state law governing such districts and the duties of a landmarks commission.

Conrad said his ordinance is still tentative in its specific provisions.

The council gave final approval Tuesday to the two ordinances that define the city’s commitment to a larger prekindergarten expansion over several years. The city will contribute $6 million in ongoing funding to an expansion to 8,500 prekindergarten seats in a county that has 7,000 currently.

Shelby County government is still formulating its contribution to the pre-k effort.

 can be built and where it can be built.

Exterior work on an existing house or building – the principal structure visible from that street -- that brings specific design review standards into play would go to the Landmarks Commission. But what are termed “minor alterations” would only require the approval of the Landmarks Commission staff. If the staff denies approval, the property owner could appeal to the Landmarks Commission.

Critics of the move by the council to add more specific terms and standards to the process said Tuesday they think Conrad’s still-forming proposal may violate state law governing such districts and the duties of a landmarks commission.

Conrad said his ordinance is still tentative in its specific provisions.

The council gave final approval Tuesday to the two ordinances that define the city’s commitment to a larger prekindergarten expansion over several years. The city will contribute $6 million in ongoing funding to an expansion to 8,500 prekindergarten seats in a county that has 7,000 currently.

Shelby County government is still formulating its contribution to the pre-k effort.

The council, as expected, delayed final votes on ordinances that would de-annex the part of Eads that is currently in the city of Memphis and an uninhabited section of flood plain in southwest Memphis. Final votes on both measures are now scheduled for May 22.

And the council set May 8 public hearings and votes on a five-lot residential single family development on less than an acre of land at 4171 Poplar Ave. as well as the planned development of 230 apartments in four buildings with a surface parking lot at 1544 Madison Avenue.

Among the partners in the Madison Midtown Planned Development is council chairman Berlin Boyd. Boyd recused himself from voting on the consent agenda that included setting the May 8 hearing and vote by the council.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 119 482 10,051
MORTGAGES 119 497 11,811
FORECLOSURE NOTICES 29 82 1,716
BUILDING PERMITS 268 1,056 21,366
BANKRUPTCIES 50 263 6,700
BUSINESS LICENSES 28 151 3,584
UTILITY CONNECTIONS 33 172 4,155
MARRIAGE LICENSES 20 111 2,290

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