Topsy-Turvy 

City and county governments have changed places on tax-rate stability.

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As the calendar tipped into June, both Memphis city government and Shelby County government were confronting the budget abyss. And it surely looked as if the county had a prefabricated thoroughfare ready to traverse that canyon, while the city didn’t even have a road map.

County mayor Mark Luttrell’s budget quickly passed muster on the Shelby County Commission and became a done deal. Luttrell’s proposed tax rate of $4.38 also passed the Shelby County Commission on first reading and looked solid for the next two readings. Meanwhile, things looked different over on city-side.

Mayor A C Wharton had raised, lowered, then raised again his proposed tax rate in response to various exigencies, not the least of which was state comptroller Justin Wilson breathing down his neck and broadly hinting he might have to intervene in straightening out the city’s books. As for the city council: 13 members, 13 opinions.

But now, with the calendar showing July, the two governments have traded positions. The city budget and tax rate are complete, even though both show all the signs of having been put together by committee in a hurly-burly, nine-hour council session on Tuesday of last week.

The tax rate proposed by Luttrell — which, unlike the budget itself, requires three full readings — is anything but a done deal, though, and suddenly looks to be in jeopardy. Here’s a status report:

• Memphis City Government: At its marathon sessions last week, the city council bit the bullet, sort of, and on third and final reading, raised the city property tax rate from $3.11 to $3.40 — the latter figure being only 4 cents higher than the city’s newly certified tax rate of $3.36.

The $3.36 figure — a purely technical one calculated to ensure the same amount of revenue as the year before — was made necessary by a serious decline in local property-value assessment.

The council had earlier passed an operating budget for fiscal 2013-14 of $622 million that included the restoration of a 4.6 percent employee pay cut dating from 2011. In a previous session last week, the council, mindful of an implied threat by state comptroller Wilson to personally supervise a balanced budget, had temporized on the pay-cut restoration.

The tax-rate increase passed Tuesday night, coupled with 50 layoffs of yet-to-be-designated city employees (and 300 other jobs cuts via natural attrition), was an alternative route to a balanced budget.

The budget also allowed for retention of the weights and balances division — despite early complaints from some members that no other city in Tennessee, Arkansas, or Mississippi maintained such a division — to perform oversight services normally the province of state government.

Once Councilman Bill Boyd established that the division comprised only four employees and had an annual cost of only $190,000 — as against prior estimates of $500,000 — that item went back in.

Community centers, libraries, code enforcement, and the city’s MATA public-transportation system were also favored with modest increases.

Altogether, it was not the austerity budget sought by some members, but not a spendthrift one, either. A genuine compromise. But it took a heap of doing and involved some heated exchanges between members.

Councilman Shea Flinn, one of those struggling to keep costs down, put himself in the firing line when he ventured a sharp retort to colleague Harold Collins’ call for “creativity” in maintaining programs (e.g., weights and measures) that Flinn and others saw as both too costly and unnecessary.

That was akin to a belief in “magic” or in the eternal life of “Tinker Bell,” Flinn said. In salvoes that followed from Collins and Janis Fullilove, Flinn was chastised for his criticism and abused for being what Collins called “a theater major.”

There was theater, to be sure. Fullilove, one of the holdouts against most of the serious reductions being discussed, objected sardonically at one point that she was being disregarded because, “I danced on the pole.” That was a reference to an embarrassing incident on a river cruise for visiting National Black Caucus members in 2010.

Joe Brown, famous for prolixity in speech-making, selected one choice word to hurl at the Wharton administration after city CAO George Little had promised in principle that new jobs would be found at some point for some of the employees threatened with layoffs.

“That’s a lie!” Brown charged.

There was more (some of it available in a longer article on the city budget online in “Political Beat”) — enough so that an ambitious compiler could easily distill a greatest hits or blooper album from raw recordings of the evening.

A more sanguine view of the proceedings would suggest that it was a first-class example of democracy at work.

In the final analysis, the budget/tax-rate outcome was a split-the-middle affair based essentially on rival budgets presented by council chairman Ed Ford Jr. (with implicit blessings from the administration) and Collins, with input from conservatives like budget chairman Jim Strickland and Kemp Conrad, moderates like Myron Lowery and Lee Harris, and hold-on-to-everything types like Fullilove, Brown, and Wanda Halbert.

Timely interventions to break deadlocks came as well from Boyd, Bill Morrison, and the normally reserved but increasingly outspoken Reid Hedgepeth.

It took the whole village, and, to say the least, not everybody was satisfied, but it got done.  

• Shelby County Government: Luttrell’s tax-rate proposal hit its first roadblock in committee hearings on June 17th, when the 11 commissioners present split six-five on second reading of the tax rate, one vote short of the seven necessary.

That was due to the absence of budget chairman Melvin Burgess, a guaranteed aye voter and the sudden reticence of Commissioner Sidney Chism, who cast a no vote.

Chism and Burgess, both Democrats, are targets of ethics complaints from Republican commissioner Terry Roland of Millington, who, like most Republicans on the commission, is opposed to Luttrell’s tax-rate proposal and alleges potential conflicts of interest resulting from Chism’s involvement with a day-care center that benefits from county “wraparound” funds and Burgess’ employment by the Unified School System, a major recipient of county funds.

Burgess is still expected to be the 7th and deciding vote for the budget and tax rate when the commission has the crucial third and final reading on the tax rate on July 8th, but Chism has apparently settled on an attitude of caution, given somewhat nuanced advice he’s received on the subject from county attorney Kelly Rayne.

And there’s a new problem for supporters of the $4.38 rate (up from $4.02 for Memphians and $4.06 for non-Memphians, the difference relating to rural school bond obligations in the outer county, incurred during the building of Arlington High School in 2004).

During committee deliberations this past Wednesday, Commissioner James Harvey, previously in the camp of those supporting the tax-rate proposal, went off on one of his patented soul-searching verbal wanderings, during which he thought out loud in the following vein:

“I’m not sure where I am with the tax rate. ... I don’t want to vote for the tax rate, but I don’t want services cut or employees laid off. ... If I had to vote today, I would vote not for the tax rate, to be honest with you. ... I don’t think line-item services have been reduced. ... We ought to be able to see some other reductions. ...

“The county commission needs a budget analyst. ... We can’t watch all the shenanigans of the departments. ... I’m in a hell of a position, and that’s very uncomfortable for me. ... I don’t know where I am, but I’m still pondering. At this point, I’m a little fuzzy.”

When Harvey was through, GOP commissioner Chris Thomas observed, “I should have gone to get a haircut during all of that.” The committee, in what amounted to a straw vote, voted five-three-one for the Luttrell tax rate. The “one” was an abstention by Harvey. Should he vote no on July 8th, along with the expected no votes of five Republicans (all except Chairman Mike Ritz) and a no or an abstention from Chism, the tax rate cannot pass.

So, with the new fiscal year technically already upon us, there is genuine suspense on the matter. And without passage of the tax rate, the previously passed county budget wouldn’t add up, and some sort of revision would clearly be in order.

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