Scrapping PILOTs could hurt Memphis
Scrapping the much-maligned PILOT — Memphis and Shelby County’s go-to economic development incentive — is a bad idea, according to a new Chamber-sponsored report.
The Little Rock-based Boyette Group found that the payment-in-lieu-of-tax incentive is an essential tool in the competition with cities that have lower tax rates like Nashville, according to a story from our Ted Evanoff.
That’s not a revelation. The city and county’s high combined tax rate is well known. But the report comes at an interesting time. Memphis City Council members and Shelby County commissioners routinely question and criticize PILOTs and their springhead, the Economic Development Growth Engine. Some candidates also regularly play to the crowd that believes government is making it rain for Big Business at taxpayers’ expense.
In that climate, the Chamber is looking at reforming local incentives, as Evanoff notes.
The study follows the analysis of FedEx executive Richard Smith, the Chamber’s voluntary chairman. Earlier this year, he called for reforms, saying economic development efforts have not spurred the economy.
The new study will be used to as the foundation for the new economic development strategy at the Chamber. Parts of the foundation have already been in put place with the hiring earlier this summer of new officials including Eric Miller as the new senior vice president of economic development.
And now, Shelby County will have a mayor, Democrat Lee Harris, who has publicly criticized PILOTs in the past, including in March, as reported by The Daily News:
“I don’t believe that works. Am I going to county government to upset that apple cart completely? Probably not because that horse has been out of the gate so long that it’s engrained in every government decision-maker that that is what they need to be doing, is giving away money to corporate interests. It’s hard to turn that boat around at this point.”
PILOTs are complex, yes, but the basic idea is easy to understand: Local governments partially and temporarily reduce local property taxes to make it cheaper for companies to build facilities and hire people. Government still collects the property tax that was already being paid, plus a percentage of the new tax revenue from the project. Win-win.
The devil’s in the details, though. And, according to the Boyette report, there’s certainly room for improvement. The report found the process was too costly and complex, and that the city and county “lack new infrastructure investment to compete with North Mississippi.” There are also “too many silos and not enough regional collaboration.”
So, are PILOTs flawless? Of course not. Are they Satan’s handiwork? No. Should Memphis and Shelby County scrap them? Not unless there’s a better alternative that would essentially do the same thing, which is to put our tax rate on par with our competitors. Should governments look to make them better? Most definitely.
Telling someone to jump off a bridge is nothing new. But saying you wish President Trump would tell Republican U.S. Senate candidate Marsha Blackburn to jump off the Harahan Bridge? Well, that’s a bridge too far
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U.S. Rep. Steve Cohen, D-Memphis, caught flak yesterday for saying just that during a recent prayer breakfast in Memphis.
Our article and the original HuffPo article made clear that Cohen’s comments were “met with laughter,” and Cohen later clarified that his comments were meant as a joke. Church of God in Christ (COGIC) Bishop David A. Hall Sr. of Memphis is heading to the White House to meet with President Trump.
Hall, who is pastor of Temple COGIC and the ecumenical support adviser to the Black Farmers and Agriculturalists Association (BFAA), will join a delegation of black ministers in meeting with Trump on Tuesday to discuss an array of topics, from prison reform to education and legislation, according to a release from Hall.
Hall is one of the black farmers suing Stine Seed Co. for allegedly selling them $100,000 in fake soybean seeds at a Memphis trade show. Hall said he particularly wants to address issues that are important to farmers. Every year, the 42-year-old Memphis in May honors a different country. But next year, the festival will break with tradition to instead honor its hometown, which celebrates its bicentennial in 2019.
Reach Ryan Poe at poe@commercial appeal.com.