Change That Cuts Deep 

Spending more money than our neighbors has failed; reduction is the only option left.

If you have a property tax rate of over $7 per $100,000 of property value, then you live in Memphis. The combined county and city tax rate for Memphians is $7.2157. Nashville's is $4.1300, Chattanooga's is $4.7042, and Knoxville's is $4.8200.

The taxman takes a few more turns with the basic formula before assessing your actual tax payment, but the point here is that you pay more in Memphis than your counterparts elsewhere in Tennessee do for equivalent property. And it's worse for owners of commercial property, who pay an even higher rate, percentage-wise.

We spend much more than competing municipalities, yet we have more schools failing, we have the highest crime rate in Tennessee, and people are leaving in droves. Businesses are closing. MLGW had fewer customers this year than the year before. Our media-market ranking has fallen from 47 to 49. We have consistently used annexation to cover a decline in population — simultaneously increasing the cost of our general services.

The word "change" was beat into the ground in 2008, but 2010 will certainly be the time for change in Memphis city government. Or else.

Robert Kennedy said, "Progress is a nice word. But change is its motivator, and change has its enemies." The City Council felt this firsthand two years ago, when we decided to cut the city's contribution to Memphis City Schools from an amount totaling 10 percent of their operating budget to one of about 3 percent.

The funding issue currently is being litigated in the courts, and, whatever the outcome, our government still needs change, and change still has its enemies.

In 2009, when it came time to actually apply cuts in school funding, the political will was lacking. So our choice now is between raising taxes, as Mayor Wharton asked (and Mayor Herenton asked before him) or going back to find the necessary budget reductions.

It is not a happy task to cut money from schools or to put a stop on pay raises or to close libraries and golf courses. Such cuts, if they come, will be things that you, as a citizen, will notice.

This is unpleasant business, but it is necessary business. Just as you can't field a Division I basketball team with players who are only 6 feet tall, we cannot stay competitive when the margin between our neighbors' tax rate and ours continues to grow. This is not a philosophical argument of liberal versus conservative or Republican versus Democrat but an economic reality.

A person can be much chagrined at what a president is doing, but to actually move to some other country is a daunting undertaking. Moving out of Memphis or Shelby County is much more manageable, and people are managing to do it daily. Look at our tax rate again: We have tried to spend more money than our neighbors, and it hasn't worked. Reduction is the only option left.

The current plan before the City Council would forgo a tax increase and spend $30 million from reserves, bringing us right to the line of our bond rating and requiring both Memphis City Schools and the city administration to make $10 million in cuts — from a $1 billion budget and a $600 million budget, respectively. But these cuts are just the appetizer before the meal. The next budget season will find us with several difficult decisions to make.

If the city is successful in its lawsuit with Memphis City Schools, then we will be faced with the question: Do we zero the schools out? And if so, do we use that money on new programs or take steps to get our tax rate closer to the range of our neighbors? Or do we continue to contribute to the schools (outside the requirements of Maintenance of Effort legislation) and make further cuts in city government accordingly?

On the other hand, should the appellate court rule in favor of Memphis City Schools, how deeply must we affect services? Every cut will have its enemies, every program its supporters. The final alternative is higher taxes, making our community even more of an outlier as a high-tax place in a low-tax state, which inevitably will push us past the breaking point. And then we will get change that is adverse to all of us — the continued migration of people from Shelby County, with those of us who stay supporting an even greater burden.

(Shea Flinn is a member of the Memphis City Council.)

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