Tuesday, March 20, 2012

City Council Chooses Reserve Funds Over Tax Increase

Posted By on Tue, Mar 20, 2012 at 5:48 PM

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Memphis property owners won't be getting that "one time" 18-cent property tax increase after all, at least not for a few months.

The Memphis City Council voted Tuesday to use a combination of $10 million in reserve funds and $3 million in spending cuts to offset a $13 million deficit in the fiscal year 2012 budget. The 10-1 vote came on a resolution by Councilman Kemp Conrad which substituted for a property tax rate increase of 18 cents to replace general fund dollars already spent for Memphis City Schools.

The council is not as unified as the vote makes it seem. There is disgruntlement over Mayor A C Wharton and his administration for giving city employees $6 million in bonuses last December after saying the city had no extra money in its budget last summer. And there is unity in calling the now-rejected 18 cent tax increase "the mayor's tax increase" as opposed to something the council came up with. But there are differences on the council that are likely to surface when the fiscal year 2013 budget is taken up in two months.

Budget Committee chairman Jim Strickland, for example, wants to see spending cuts and implementation of efficiency study recommendations. "Frankly, there's been little action on saving money," he said. Councilman Joe Brown wants the council to revisit the buyout for AFSCME workers.

Council chairman Bill Morrison said the measure adopted Tuesday "is just for the next three months."

In June, the council could reconsider a tax increase as well as back payments to Memphis City Schools, spending cuts, and cuts in city employees and/or benefits to overcome a projected $47 million deficit in the next budget.

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