Tuesday night in a marathon budget session, the Memphis City Council took on some of the tough decisions necessary to right the fiscal ship of the city. Facing scrutiny and not so veiled threats from the State Comptroller's Office along with pressure from employees, (particularly public safety officers) to restore previously reduced pay, this Council finds itself in a bed of thorns with few roses.
Many city employees packed the chambers to watch the proverbial sausage being made. Facing significant debt, declining property values and property ownership (taxpayers), increasing costs, and seemingly higher demands on and for city services, this process can't help but be a nasty one.
The need for new revenue without raising either the local sales tax or the property tax rate is the magic trick this council has been attempting to master. It is obvious that there is little support overall for any significant increase in the burden on tax payers, but with such a large gap to fill, they appear to be attempting to pull a rabbit out of the hat by increasing the number of traffic cameras and adding speeding cameras (one measure that did pass). In a City where 50% of the drivers are uninsured and there exists an overall 30% poverty rate, it seems that putting more pressure on drivers might not be the safest thing to do, practically or theoretically. Realistically, it will probably create more unlicensed, uninsured drivers and more unemployment for those that decide not to drive "dirty," while creating long term receivables or uncollectable receivables on the city's books. In the meantime, public transportation continues to be reduced to unacceptable levels for a sprawling city the size of Memphis.
Additionally, EDGE (Economic Development Growth Engine) and its predecessors representing the city and county, manages to keep giving away millions of dollars in tax revenue to large, profitable, private, and/or public corporations through the PILOT (Payment in Lieu of Taxes) program with every threat to pull out or promise to expand. With all the studies that have been done, it would seem the study that would make most sense is a comprehensive evaluation of the ROI (Return on Investment) of past PILOTs and an overall cost benefit analysis of continuing to grant companies tax breaks for PROMISED capital investment and job creation.
At the end of the day, there exist tremendous challenges for this council to figure out. It is going to take great leadership and extraordinary collaboration from the Administration and the Council to fix this one. Other than failing to pass a budget, the Council did pass some measures, all of which may be revisited at next Tuesday's meeting. Here is a re-cap of what was done at this past Tuesday's (6/18/2013) meeting:
Recap of the Votes
• Voted to restore $225,000 to the Memphis Music Commission
• Voted to cut $250,000 from EDGE (Economic Development Growth Engine)
• Amendment passed eliminating 400 city jobs. One hundred through layoffs and 300 through attrition – where positions of resigned and retired workers are not replaced.
• Voted 8-2, passing the addition of up to 150 speed cameras to school zones/neighborhoods
• Passed the addition of 15 new red light cameras
• Failed - The measure to return 4.6% of pay (previously cut) to city workers
• Failed - A measure by Councilman Flynn to increase the property tax rate to cover all short falls
• June 25, 2012 Council will reconvene to vote on an acceptable budget