Tuesday, June 21, 2011

City Council Passes $661 Million Operating Budget

Posted By on Tue, Jun 21, 2011 at 10:57 PM

After months of committee meetings, rejected proposals, and stalemates, the Memphis City Council on Tuesday passed a $661 million operating budget for the coming fiscal year.

The 9-3 vote came near the end of a six and one-half hour meeting that featured ongoing negotiations between council members and Mayor A C Wharton and members of his staff. The council chamber was nearly full with so many members and supporters of city sanitation workers and the local AFSCME union that it sometimes seemed like Labor Day had come early.

Wharton said the budget reflects "fundamental" changes and a process that was difficult for him personally. "This is not chump change," he said. Highlights of the budget:

The $661 million operating budget is $12 million less than this year's operating budget.

The property tax rate stays at $3.19 but — and this is a little complicated — it could go up 18 cents in August depending on what courts say about the merger of city and county schools and the city's funding obligation. The council passed a "one-time assessment" of 18 cents for schools to cover its maintenance of effort obligation. For taxpayers, that would be a tax increase, although council members characterized it as "restoring" the 18-cent tax cut three years ago. Combined with the Shelby County property tax rate of $4.02, Memphians will pay either $7.21 or $7.39. That is the highest property tax rate in Tennessee and, more to the point, the highest in the Greater Memphis area where residents have been fleeing to the suburbs by the thousands.

The projected number of city employees in 2012 is 6,903, a fiive-percent decrease from the current number of 7276 and the lowest number since 2007. Shelby County has about 6,000 employees, so the combined governments have around 13,000 employees.

AFSCME workers got a promise that the city administration would work toward giving its members a buyout option in lieu of having to work well into their senior years. The terms are not set yet, but the cap would be $40,000 to $60,000 in a one-time payment, depending on age and years of service. The total amount of the buyout program would be capped at $13 million, to come from city reserve funds. One of the biggest ovations of the meeting — and there were a lot of them — went to a young AFSCME worker who said he had been followed earlier in the week by television news reporter Ben Ferguson, who claimed the worker went into a store to buy lottery tickets while on the job. Not so, said the employee. "I was buying two pieces of chicken. It was two thighs."

There are 125 layoffs of city employees and a 4.6 percent pay cut for employees who did not take a pay cut this year.

The first three hours of the meeting belonged to AFSCME. A few dozen people spoke, including union rank-and-file and supporters, both black and white, young and old. Most of the speeches were delivered with gusto, and the meeting sounded like a union rally at times. The show of strength apparently worked, as the buyout plan, which was proposed by Councilwoman Janice Fullilove, was something of a surprise. It passed unanimously.

The budget debate was less contentious than it could have been. Members avoided a 6-6 split along racial lines, which was possible because the absence of Barbara Swearengen Ware. Councilman Shea Flinn, head of the budget committee, agreed with Wharton that fundamental changes had been made, and he went out of his way to praise firefighters and their union for their cooperation.

Wharton said "the door is open" for police and other unions to come to him with ways to spread the cuts around, although the amount is not negotiable.

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