THE NEXT BUDGET We refuse to adapt, and it is killing us
Memphis City Council members (seated, from left) Shea Flinn, Kemp Conrad and Harold Collins talk with representatives from various city divisions during a budget hearing recess in May. Lower property tax revenue and a warning from the state complicated the FY2014 budget process. critical of its financial situation and heavy debt load.
The comptroller said the city’s revenue stream did not support its heavy debt, that the city’s reserve fund was inadequate and the city had to stop kicking its debt service payments down the road.
The council ended up passing a compromise budget and raising the property tax rate from $3.11 per $100 of assessed value to $3.40 to address the property tax shortfall and the comptroller’s admonitions.
We invited the 13 council members to express their thoughts about the process and what needs to be done to shore up the city’s long-term financial health. Comments from council members Harold Collins, Kemp Conrad, Shea Flinn, Wanda Halbert, Lee Harris and Myron Lowery are in today’s Viewpoint section. Councilman Jim Strickland’s guest column expressing his thoughts was published July 9. Council members weigh in on budget process. 3V
A basic understanding of the theory of evolution is that something either adapts or it dies. We know we have a property tax rate that makes us uncompetitive in economic development; therefore we have to level the playing field by offering PILOTs. Despite our overreliance on these incentives, we know that job creation is continuing to lag in our community.
So I understand when some of my colleagues see city government as the employer of first, second and last resort. The problem then becomes: How high does our tax rate have to be? The tax rate increase the citizens received this year will not cover it.
Since 2005, the city has spent hundreds of thousands of dollars on the semiannual practice of conducting efficiency studies, business assessment plans and strategic plans. They always say the same thing. The government as currently operated is unsustainable. We don’t like the answer, so we ask the question again. While we keep waiting for the facts to admit they are wrong, we remain uncompetitive in economic development, we see thousands choose to live elsewhere, and we ask those who remain to pay more and receive less.
We are refusing to adapt. And it’s not working.
Some of my colleagues disagree with the notion that having a much higher property tax rate has a negative effect on our community. Yet, when I challenged them to propose a tax rate that would offer sustainability (around $4.00), even the crickets were silent. When we have tried to increase fines and fees to take pressure off the property tax rate, those changes are resisted as well. When we attempt to reform government to a sustainable level, well, then things get really ugly.
No one wants to reduce the workforce through either layoffs or attrition, or cut pay; if we don’t, the tax rate required will force the private sector to make the cuts we will not. We have to adapt or die.
The most recent budget attempted to do neither. We did not make the sustainable cuts that could facilitate growth in our tax base, nor did we raise the appropriate amount of revenue for us to have a sustainable government where the citizens who choose to remain actually get services commensurate with their tax bill.
We chose not to adapt, yet we refuse to admit it is killing us. Shea Flinn Shea Flinn represents Super District 9, Position 2, on the Memphis City Council.