VOL. 133 | NO. 89 | Thursday, May 3, 2018
Luttrell Proposes Adjusting Down County Property Tax Rate
By Bill Dries
Shelby County Mayor Mark Luttrell is proposing a rollback of the $4.11 county property tax rate to $4.05 in his last budget proposal to the Shelby County Commission.
Luttrell will formally present the $1.3 billion consolidated county government budget to commissioners at Wednesday, May 9, committee sessions. The proposal, known as the budget book, was delivered to individual commissioners Monday.
“We’ve got, I think, a very unusual budget this year,” Luttrell said. “The health of Shelby County government is good.”
Luttrell said Wednesday, May 2, fewer appeals of the 2017 countywide property reappraisal were the reason for the rollback to $4.06, with a tax reduction of another penny added by the administration.
Because there were roughly half as many appeals as predicted of property reappraisals for taxation purposes, along with a tax collection rate percentage in the high 90s, the county is expected to show an $18 million to $25 million surplus when the current fiscal year ends June 30.
It will be up to county commissioners to approve and/or amend the budget proposal and then set the property tax rate.
“We’ve been able, I think through some very rigid management principles … to streamline the functions of county government – thus saving some money here and there,” Luttrell said. “I like to think that we are very frugal in how we function and how we operate and that frugality allows us to be progressive in addressing some of the very core needs of our community.”
Luttrell’s proposal on effectively right-sizing the tax rate comes after Memphis Mayor Jim Strickland proposed in his April 24 budget address a similar rollback of the city’s $3.27 property tax rate to $3.19. The projected windfall on the city side at the end of the fiscal year is $8 million.
Luttrell’s budget proposal will include:
• $7.8 million more in county funding for all seven of the county’s public school systems distributed based on average daily attendance. It would bring total county operating funding for public education to approximately $427 million. The funding also increases the county’s “maintenance of effort” to schools – the amount that by state law it cannot decrease unless attendance drops below a certain level.
• A 3 percent pay raise for all county employees – a larger 8.4 percent pay raise for Shelby County sheriff’s deputies taking the top pay grade from $57,881 a year to $62,800.
• A phased-in rise in pay to bring all full-time county employees to a minimum of $15 an hour
• The fifth year of continued funding of $3.5 million for existing prekindergarten programs in the county, with a final decision on county funding of a prekindergarten expansion likely to be made by the new mayor and County Commission that take office Sept. 1.
• $1 million more for Regional One Health
• $1.4 million toward the county’s response to the opioid addiction problem that Luttrell said he believes has still not peaked in terms of its human impact and workload on local emergency responders and other agencies.
“I think you can expect the commission to dive deep on this. … I think when that happens we are going to have to negotiate with them and let them know that what we have proposed is within the tax rate we are proposing,” Luttrell said of the budget process. “I think we can assume they will not want to increase the tax rate. If anything, it would be reducing the tax rate. But by the same token, and I think I speak factually here, this County Commission likes to spend money. And I have some degree of confidence that they’ll probably want to add to the budget.”
Commission chairwoman Heidi Shafer has cautioned that in the final budget proposal of the current commission’s four-year term of office, the body should try to avoid making major multi-year commitments that will obligate the new mayoral administration and commission that take office Sept. 1. In addition to a new mayor, a majority of the county commission – at least eight of the 13 commissioners elected in the August county general election – will be serving their first term of office.
The $53 million capital budget proposal from Luttrell’s administration includes:
• $25 million for the new county Health Department building that is part of what Luttrell has outlined as an effort to make the division more of a public health agency.
• $3 million for planning and design exploration of the county getting into the business of providing sewer services in unincorporated areas. That effort follows Strickland’s decision last August to end new connections to the city sewer system outside the Memphis city limits and apart from evergreen agreements Memphis has to treat sewage for some suburban towns and cities within the county.
• $8 million as the latest of a multi-year payment plan on the new radio system used by city and county first and emergency responders, including firefighters and police and sheriff’s deputies.
• $7 million for an electronic health record – or EHR – system at Regional One Health.
The $53 million does not include capital requests from Shelby County Schools and the six suburban school systems, which are allocations also distributed based on average daily attendance.
County administration and finance director Wanda Richards said the administration’s limit on its capital budget is typically $75 million, which leaves room for schools requests.
The county’s debt remains under $1 billion as the end of the fiscal year nears. Luttrell pointed out it is now below $900,000. But he anticipated the school systems are likely to all have capital needs given there was a freeze on those projects during the mergers of city and county schools and then the demerger into the seven systems within the county.
Nevertheless, Luttrell is proposing a realignment of the tax rate that would reduce the portion of the tax rate that goes to debt service by 7 cents.