Find balance between cost cuts, growing revenue
Mayor A C Wharton presented a budget in April to the City Council that included no layoffs, continuation of the same service levels and a proposed tax rate of $3.36. Unfortunately, several of my colleagues have perpetuated the myth that this was a tax increase; honestly, it was not.
The Shelby County Assessor appraised properties within the entire county, and for the first time in anyone’s knowledge there was a significant drop in property values. The state provides that municipalities may not receive a windfall if property values increase, nor can there be a significant loss; therefore, a certified rate is established that would allow the municipality to receive the same amount of tax dollars as the year before. In essence, the $3.36 tax rate generates the same tax bill the $3.11 rate produced in 2012.
This year’s budgetary debate was the ultimate war of wills and divergent philosophies on how to make city government more efficient and balance our needs with our resources. Several on the council believe the only way to fix our financial challenges is to cut spending and lay off employees. Others believe we must increase revenue and create additional funding sources. In all actuality, both groups are right.
In order for us to move forward, we must find a balance between cutting costs and growing revenue streams, which does not necessarily mean new fees or fines.
In 2008, the council made the bold decision to cease funding schools and reduced the tax rate from $3.43 to $3.19. Our citizens were victim to triple taxation (remember the wheel tax) for schools, which was inherently unfair. We have eliminated funding for motor vehicle inspections; they cost the city $2.5 million annually but the entire county reaped the benefits. It is decisions and actions like these that the council must continue to make.
We must also realize that our responsibility to our citizens is to provide services that cover their safety, security and wellbeing. To provide these services, we must have employees; their salaries and benefits total 69 percent of our $614 million budget. Overall, we have seen a decline in employees in all divisions except Police Services.
Our future is predicated on how we handle additional issues, including the pension fund, debt service and OPEB expenses. We should be exploring opportunities to grow our way out of this financial downturn. Revenue is increased when we have thriving businesses that employ our citizens and pay a living wage. Successful businesses pay taxes and citizens with disposable income contribute immensely to our sales tax revenue.
Yes, the City Council voted in June to approve a tax rate of $3.40 which effectively is a 4-cent increase over last year. On a home worth $100,000, that would be $10 for an entire year; a small price to pay, especially since property taxes had not been increased since 2005. Myron Lowery represents Super District 8, Position 3, on the Memphis City Council.