Thursday, March 18, 2010

A Decent Proposal: Marlin Mosby

Posted By on Thu, Mar 18, 2010 at 8:30 AM

[As stated yesterday, the Flyer's cover story this week takes an early look at the consolidation process and players. To read it, click here.]

For the last 25 years, Marlin Mosby has been trying to hire Ivy League graduates to come to Memphis to work with his company, Public Financial Management (PFM). And in that 25 years, he's been able to convince only a few who didn't already have ties to the area.

"We hired two who came here and they left within a couple of years," he says. "Most I wasn't able to get here. ... People who want to compete against the best and want to be at the highest level of their career, they don't see Memphis as a place where they are going to be successful."

He staffs his office here with Rhodes graduates.

(I know, I know. You're thinking: What does this have to do with consolidation?)

PFM is the financial adviser for Shelby County, Germantown, Collierville, and Bartlett, and was a consultant for the city of Memphis for 20-plus years until a few years ago. As he sees it, Memphis doesn't have high taxes because of government inefficiency or corruption:

"It appears on the surface that we're paying a significantly higher tax rate than Nashville/Davidson County. To make it comparable, you have to figure out what the tax rate would be if you levelized it across the whole community," Mosby says. "It brings it much closer."

But the most important factor for him is the relatively large number of children in the area. In the Memphis region, school-aged children account for almost a quarter of the population. In almost every other city, school-aged children are about a fifth of the population.

School-aged children consume a lot of resources, and don't contribute a dime. But it's not because the area has a preternaturally high birth rate.

Generally, the bulk of a place's taxes are paid by people 25 to 50. Unfortunately, those are the people that are leaving Memphis and Shelby County.

"If you look at the difference in the percentage of the population we have of school-aged children versus the percentage of the population of school-aged children in Nashville ... it works out to about $200 million a year," Mosby says. "For every working family, we have to spend more money to finance schools."

And that's just with education. It doesn't take into account the criminal justice system or the health department.

"That implies to me that we're not doing quite as poorly as we think we are," he says. "We have a demographic issue that drives the way we spend money here."

Mosby suggests that we need to retain and attract talent (something that several groups are working on around town). The other idea would be to make education less costly.

"The big dollar savings are in schools," Mosby says of consolidation. "There would be a huge impact on savings if we could find some way to consolidate schools but keep neighborhood control of them. But it's a non-starter at this point."

The charter commission established early on that it wasn't interested in consolidating the school systems, as it's just too controversial. And, as noted in John Branston's sidebar, "Why Is It So Hard to Reform Government?" in this week's story, schools were a non-issue in both the Indianapolis and Louisville consolidations, though for different reasons.

John also says this:

"What, then, is left besides good intentions after you carve out schools and public safety, which account for most public employees and budget expenses, from rebuilt government?"

Mosby thinks the final charter document will be watered down, but says he's still for consolidation.

"It saves money, but it doesn't save huge amounts of money," he says. "Obviously there is duplication, if you are able to eliminate that duplication, it saves money."

PFM also consulted for Louisville during that city's consolidation with Jefferson County. That community spent years putting a plan together, and services changed dramatically afterward.

"Today they see themselves as a community and 10 years ago, they did not. Nashville sees itself as one community," he says. "If we can start a discussion about how to make this a place where people want to live, in the long-run, it helps everyone. We've gotten to the point where we don't want to have a discussion about the long run, all we care about is: What's it going to cost me today?"

"I don't think there's any question that it would be good," Mosby says of consolidation. "The history everywhere else has been positive."

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