Tuesday, June 4, 2013

Budget Ideas

Wharton recalculates, council complains, commission sets a rate.

Posted By on Tue, Jun 4, 2013 at 4:06 PM

You ask for suggestions, you get suggestions.

City councilman Jim Strickland, chairman of the budget committee, invited colleagues to make suggestions for revising next year's budget. The state comptroller recently served notice that Memphis cannot balance its budget by shifting debt payments around.

Six members took Strickland up on his suggestion, with ideas ranging from cutting corporate subsidies and the animal shelter to restoring funds for city employees, community centers, and libraries. Three members pressed for more savings and lower taxes, and three recommended restoring services and employee pay and benefits previously cut.

Absent were the sort of extreme alternatives floated by Mayor A C Wharton last week, such as raising the property tax rate from $3.11 to $4.83 or setting the tax rate at $3.11 and laying off 3,250 employees. Wharton was bracketing the target. No one seriously believes either of those things will happen. The mayor's latest recommendation, presented to the council Tuesday, is a $3.51 rate with 400 buyouts and layoffs of employees. But several council members were not ready to sign on to the mayor's plan.

Kemp Conrad said reducing the solid waste budget by $17 million would save homeowners $60 to $85 a year in fees.

Edmund Ford Jr. suggested restoring $5 million for community centers, libraries, and code-enforcement workers and shifting $12 million for streetlights to Memphis Light, Gas & Water.

Harold Collins opted for eliminating the animal shelter and trimming police expenditures and funding for economic development to save $9.5 million.

Janis Fullilove opted for allocating $1 million for the YWCA's domestic violence program, $3.4 million for a parking garage in Cooper-Young, and $1.5 million for Southbrook Mall.

Lee Harris recommended cutting an International Paper subsidy of $3.5 million and $2.1 million for the Economic Development Growth Engine.

Wanda Halbert wanted to restore the 4.6 percent salary reduction to city employees with "absolutely no employee layoffs." And she wanted more information about any laws that prohibit transfer of operating funds to capital improvement funds and vice versa — a frequent disclaimer when such suggestions are made.

Halbert wants to revisit all sharing agreements with county government — a tall order for a fiscal year that ends June 30th. The Shelby County Commission tentatively approved a budget this week that raises the county tax rate from $4.02 to $4.38. It includes a $20 million increase in funding for the Unified School District, which is $10 million less than the school board requested.

Doing the math, the combined property tax rate for a Memphis homeowner looks to be around $7.89 heading into the late innings. But I wouldn't bet against $8 when all is said and done.

On closer inspection, savings often turn out to be illusory because they shift costs and responsibilities from the city to the county. The obvious example is school funding, with Memphis no longer paying $64 million a year because of the merger.

I asked interim superintendent Dorsey Hopson what impact charter schools and the state-run Achievement School District will have on the budget. There are 41 charter schools with approximately 12,000 students scheduled to be in the mix in August.

He said that if the ASD takes over a school, "all our operational costs would go away but we lose the per-pupil funding" so it's a wash. If the ASD authorizes a charter school, "the charter gets the building for free, so there's a big advantage to working with ASD." Other charter schools have sharing agreements with the school system to pay to use vacant space in buildings where the district school continues to operate.

Five district schools are closing this summer, with 12 more under study for closing. The operating costs, Hopson said, are roughly the same whether a school is full or half-empty. Opponents of school closings say the savings are overstated, doom neighborhoods to further decline, and put students at risk in hostile settings.

Whether or not suburban high schools stay at capacity will depend on the municipal schools outcome and the treatment of students who live in unincorporated Shelby County. Germantown schools, for example, enroll a large number of students who don't live in the city of Germantown.

There are lots of uncertainties, but higher taxes is not one of them. That's a given.

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