Lots of Memphis-related business news in the national press today. Delta Air Lines wants to buy US Airways, which would be its first acquisition since buying Northwest Airlines in 2008. US Airways offers a good deal of what little competition Delta has in Memphis.
The Wall Street Journal also has a story about St. Joe Co. scaling back its Florida Panhandle developments near Destin and Panama City, favorite destinations for Memphians. Anyone who has been down there and seen WaterSound at Santa Rosa Beach probably saw this coming. A successor to WaterColor which is a few miles to the west, the development’s empty lots and unoccupied houses in the midst of all that expensive infrastructure says it all. Some of us at Memphis magazine and The Flyer freelanced for a magazine underwritten by Joe, and we miss the assignments and the paychecks. Joe gave the land for the new airport in Panama City and is the largest landowner in northern Florida, with more than half a million acres.
If you're on Facebook prepare to be monetized. The Facebook IPO could come as early as next week. Once it’s priced, ordinary investors can own a piece of the company that boasts more than 800 million members. I predict a “hot” IPO that rises but then tapers off. Over time, I think privacy concerns will wear down Facebook and cut the number of members.
I saw the movie “Tinker Tailor Soldier Spy” last night on the recommendation of Flyer movie critic Greg Akers. No one in our group of six understood it very well. The next time I watch Gary Oldman will be in “Shaun of the Dead.” “Tinker etc.” should come with an introduction in which the actors tell us their movie names and identities. Or explanatory subtitles in addition to the Russian dialogue subtitles. Better than all those commercials you have to sit through.
To research the schools merger story, I dug out my old tax bills and looked up some old articles to put together this chronology, which I then ran past City Finance Director Roland McElrath to check the numbers. Tax bills should be as clear and easy to understand as restaurant checks.
2007. The Memphis property tax rate is $3.43. There is no breakout for schools on the tax bill.
2008: Mayor Willie Herenton proposes a 58-cent increase, which would push the rate over $4 — one of those milestone numbers, sort of like $4-a-gallon gas. The Memphis City Council cuts school funds from $93.7 million to approximately $27 million, against Herenton’s advice, in an effort to shift school funding to Shelby County. But other city government spending, including a 5-percent pay raise for employees, costs $42 million. The net result is an 18-cent tax decrease to $3.25.
2009: It is a reappraisal year, and there cannot, by law, be a windfall tax increase due to higher valuations, so the tax rate has to be adjusted. The council sets the rate at $3.19. The tax rate includes a breakout of $.1868 for “schools” on the bill. There is talk of a special tax bill for schools in addition to this but it does not happen. In the special election in October, A C Wharton is elected mayor with 60 percent of the vote.
2010: The rate is $3.19. Chancery Court rules against the City of Memphis and determines that the funding cut in 2008-9 is due back to Memphis City Schools. The city appeals (the appeal is still pending).
2011: Mayor Wharton proposes restoration of the 18 cents for schools. In June, the council puts in a “one-time assessment” of 18 cents for schools to be held in a separate bank account until lawsuits resolved. (McElrath said the funds can be used to pay for any education obligation city has, whether 2009 or any current obligation.) There is confusion in the council chambers. Some councilmen believe this amounts to a tax rate increase to $3.37. But the council sets the rate at $3.1889, virtually the same as the previous year, by taking out the .1868 for schools. Tax bills that go out in July include the “one time assessment” of 18 cents for schools and a disclaimer that any additional taxes approved by council will come in a separate bill. However there is, so far, no supplemental tax bill. In October, Wharton wins the mayoral election with 65 percent of the vote and council incumbents are reelected.
City taxes for schools are small compared to county taxes. On the 2011 Shelby County tax bill, of the $4.02 tax rate, $1.30 goes to city schools and 60 cents goes to county schools. The tax impact hits all property owners while the school organization issues mainly impact people with school-age children in or about to be in public schools.