Strickland says budget is his ‘worst as mayor’
With the Memphis city budget looking tight and city needs mounting, city leaders are divided over whether raising property taxes could help solve the fiscal issues.
Memphis Mayor Jim Strickland is noncommittal on a tax increase. He is not diametrically opposed to one but it’s unlikely that such an increase
would appear in his proposed budget this April. At least one influential member of Memphis City Council would support such a property tax hike. For another, the vice chair, a tax hike is a nonstarter.
In media interviews and a speech at the Frayser Exchange Club Thursday, Strickland said the coming budget would be his “worst as mayor.”
He noted the rising cost of the city’s pension, a decline in the payments-inlieu-of-taxes made by Memphis, Light, Gas and Water and the repeal of the Hall Income Tax as reasons for the budget’s tightness. He also said the potential merger between Methodist Le Bonheur Healthcare and St. Francis will cost the city a projected $3.5 million in tax dollars when St. Francis transfers from forprofit to non-profit.
“I’m certainly not proposing one now ... In my twelve years in government, I’ve never ... signed a pledge never to raise taxes. I’ve refused to do that because I think that’s not responsible, but I’ve never supported a tax increase either,” Strickland said. “I don’t think we will be proposing one this time ... This is the toughest budget by far in my fourplus years as mayor because revenue has been cut from outside sources.”
Most city departments have been told to bring in their operating budgets with no year-over-year increase. The city’s required pension contribution is expected to climb by $7.8 million, eating into much of the city’s new revenue. Health care costs are also expected rise.
In the past, Strickland has noted
Memphis’ high property tax rate and argued that the city’s taxes are already too high. Memphis has a much higher city rate than the surrounding municipalities, a factor that has contributed to the city’s population outflow over the years.
For example, Memphis has a tax rate of $3.19 per $100 of assessed value. In Germantown, the rate is $1.95. Collierville has an even lower rate of $1.83 per $100 of assessed value.
Difference among council about taxes
There are members of Memphis government that would support a tax hike. Memphis City Council budget chair Martavius Jones would support a property tax hike, he said Tuesday. Jones, after city officials previewed the upcoming budget, said the city “could not cut its way to prosperity.”
“What we’ve been doing, as was admitted today, is that we’ve been cutting ... so I think that we’ve done a good job in managing those costs, but, at some point, we do have to look at our revenue,” Jones said. “If we still are saying that revenues are only going up at 1.5%, but expenses are going up a greater rate ... you can’t continue to cut to address that revenue shortfall.”
Jones said he would be in support of a tax increase.
“We are not investing in ourselves ... The facilities that we have for our citizens, we are not maintaining them properly. It costs money to do that ..,” Jones said.
There is at least some opposition on City Council to a tax increase. Vice Chairman Frank Colvett is on the opposite side of the fiscal spectrum.
“You can’t tax your way to prosperity either,” Colvett said. “What I’ve learned through four budgets is ... if you exert fiscal responsibility at an early stage, that will help you through this process ... This is going to be a very hard budget year. I’ll never be in favor of raising taxes for any reason.”
Colvett noted the City Council grant program, which allocates about $2.6 million to non-profits across the city. It is common for members of the council and the Shelby County Commission, which has its own program, to use the grants as a means of giving back to their districts.
There are five brand-new members of Memphis City Council who will be going through their first budget cycle, Colvett said, acknowledging that he thinks it could be hard for them to say ‘no’ to their constituents.
“You’re going to have $7 million in ask and you’re going to have over 200 groups and so are you ready to start telling other council[member]s ‘no’ for their districts. At what point do you say ‘stop?’ I’m advocating for a strong cap at $2.6 million.”
Samuel Hardiman covers Memphis city government and politics for The Commercial Appeal. He can reached by email at samuel.hardiman@commercialappeal.com or followed on Twitter at @samhardiman.