Tuesday, June 18, 2013

State Comptroller Wilson: Can Do City Budget Himself and Set Tax Rate, if Necessary

Regarding Tennessee law: “It’s pretty strong, and there’s absolutely no question that I’ve got to approve the budget. If the budget doesn’t balance, I can bring it into balance. There’s no question I can raise taxes."

Posted By on Tue, Jun 18, 2013 at 9:40 AM

State Comptroller Justin Wilson
  • State Comptroller Justin Wilson
Even as the Memphis City Council, now in Hail-Mary mode, scrambled this week to choose from several budget alternatives, including a brand-new austerity proposal from budget chairman Jim Strickland, state Comptroller Justin Wilson in Nashville was, resolutely if a bit apologetically, pointing out the bottom line.

In a strong letter last week to Council chairman Edmond Ford Jr., Wilson had written that if the Council could not successfully conclude a workable budget within acceptable financial guidelines “someone else may end up doing this.”

That someone, he made clear in an interview with the Flyer on Monday was himself, the state Comptroller.

In the interview, Wilson cited Section 9-21-403 from the annotated Tennessee code, which, he said, gave him virtually unlimited authority, in a pinch, to take over the process of budget-making from Memphis city government —using his power in a virtually line-item sense, if necessary, to add or delete budget items and to set the tax rate for Memphis or any other gridlocked and out-of-balance jurisdiction.

“It’s pretty strong, and there’s absolutely no question that I’ve got to approve the budget. If the budget doesn’t balance, I can bring it into balance. There’s no question I can raise taxes. I want to be real clear about this. I hope we never get there. I do not anticipate that we get there. It’s the last thing in the world I want to do. This is not what I’m about. I don’t want to argue about my authority and all that kind of stuff....”

The comptroller paused to take a breath.

“...But just look at that statute. The authority is powerful!!”

Wilson read from portions of the statute, citing one passage in particular, which points out what can happen if a local jurisdiction fails, in the judgment of “the state director of local finance” (i.e., the Comptroller) to submit a budget that can be kept within balance.

The section reads, in part:

“The annual budget of each local government with notes outstanding shall be submitted to the state director of local finance immediately upon its adoption. The state director of local finance must thereupon determine whether or not the budget will be in balance in accordance with the provisions of this chapter.

“If the budget does not comply with the provisions of this chapter, then the state director shall have the power and the authority to direct the governing body of the local government to adjust its estimates or to make additional tax levies sufficient to comply with the provisions of this chapter.” [Italics ours]

Wilson repeated that he had no desire to impose this authority so long as the City Council and the administration of Mayor A C Wharton were making bona fide efforts to pass an acceptably balanced budget and establish clear financing guidelines.

“Oh, absolutely not. I think they’re going to work it out. I really do. I do think they are. But it’s there.”

Regarding the clearly stepped-up sense of urgency apparent in Council budget deliberations, Wilson said, “Well, that’s good. My whole goal is to have a balanced budget.” It was not his concern “how they get there,” and he was expressed indifference about specific controversies, such as that over the restoration of salary cuts made in 2011 for city employees.

“That’s not my fight, how that plays out or doesn’t play out,” Wilson said.

Asked if he had an optimistic attitude about the Council’s efforts to establish a workable budget, Wilson said, “Oh yeah, I do. I really do. And the point is they are now talking to each other. And I’m hearing from council members that they want to come to resolution. Now, they may have different resolutions. But that’s all probable. Once you acknowledge there’s a problem and you all want to come together to solve it you get a solution. I think it’s wonderful, and I hope they do.”

More from the interview and on city and county budgets in this week's Flyer issue.

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