The City Budget Deal for Dummies: How It Went Down And Why It May Not Work

Posted by Jackson Baker on Thu, Jun 23, 2011 at 11:23 PM

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So how did it happen that two proposals, — one enabling voluntary buyouts by city sanitation workers, another adding 18 cents to the property tax rate, each proposal stymied for weeks by divisiveness and controversy — should have virtually sailed through the Memphis City Council in the waning moments of Tuesday night’s six-and-a-half hour final budget session?

The answer is simple: Even trade.

Earlier in the evening, the Council could have fairly easily passed a balanced budget containing neither of the hot-button provisos. Mayor A C Wharton, biting several bullets, had proposed a balanced budget loaded up with various cuts and modest revenue enhancements.

It all came unglued — but just barely — when the Council rejected a component authored by Councilman Ed Ford Jr. assessing a series of fees (e.g., $7 for passenger vehicles ) for automobile registration. That would have netted some $2.5 million, the approximate amount the mayor’s budget package was now short by.

So why couldn’t the 12 Council members (13-minus-one , the indicted, since retired Barbara Swearengen Ware) agree on some modest tweaking — maybe just a modest hit on the city’s reserve fund?

Because key members were holding out for the sanitation workers’ buyout, on the one hand, and the 18-cent tax restoration, on the other. And nobody was giving.

The bottom line is that some accommodation was reached during the two interminable “breaks” that were declared during the course of the meeting. These were actually occasions for members to conduct direct negotiations — each according to their own fashion.

Most members are at least modestly surreptitious in these bargaining sessions. Others are not. Shea Flinn, who is camera-fodder and knows it, and who, as budget chairman, wields more than his share of power, prefers to work right out in the open, letting himself be seen in casual-looking but intense huddles with Wharton and other Council members.

Sunshine Law, Shmunshine Law: A deal had to be made.

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Ultimately two dog-and-pony shows went on. The first began with a proposal from Councilwoman Janis Fullilove that the city set aside a fund — it started at $6 million and later got upped to $13 million — expressly to allow city sanitation workers to request , and get, voluntary buyouts in sums ranging from $40,000 to $60,000 apiece, calibrated to age and tenure in some way yet to be determined.

The buyout concept had been safely extracted from a volatile package proposed a couple of weeks back by Councilmen Kemp Conrad and Reid Hedgepeth. What had made that package combustible and prompted a mass turnout by city union workers and supporters, both two weeks earlier and at Tuesday night’s Council meeting, was Conrad’s core proposal for a privatization of sanitation services.

Once Fullilove moved for the buyout, there was none of the shock among her colleagues that might have accompanied a surprise proposal. This one clearly had been group-vetted and had the Good Housekeeping Seal of Approval. It provoked only modest discussion, and, on cue, Mayor Wharton materialized in the well to assure everyone that, by Golly, he could work with this idea and dot the i’s and cross the t’s of it.

Of course, he could, since, in general terms, he had already signed off on it.

But that was just Part One of the deal. Part Two came next, with a proposal from Flinn that rescued a previously discarded proposal by Harold Collins to restore the 18 cents that had been cut from the tax rate back in 2008. That was when the Council gambled it could renege on its annual payment to Memphis City Schools in the amount of $57 million.

The idea back then had been that state law requires school support only from county government. And surely the courts would see things the Council’s way, wouldn’t they? The courts didn’t, ruling that maintenance-of-effort provisions required the continuation of the city payments, and the Council, having blown most of its savings that year in an abundance of ways, some reckless, has been faced ever since with the wrenching problem of paying off MCS for the shortfall.

After members had had a chance, during the second of the two prolonged breaks, to vet the numbers on the 18-cent proposal, they came back in session and in short order approved this Part Two of the deal, contingent on the buyout as the buyout had been contingent on the tax proposal.

The only debate concerned whether Flinn’s original formulation, assessing the tax for the duration of “Memphis City Schools as an entity,” would pass muster, or whether another variation, to make the 18-cent assessment a one-year only tax, was preferable.

The difference was crucial and break-time discussions had hinged, among other things, on a sense that MCS superintendent Kriner Cash might be more inclined to agree on a settlement figure with the City if the tax weren’t so open-ended. That sealed the deal for the one-year-only version (renewable, of course, a year from now).

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For the record, one year’s worth of the 18-cent add-on tax, coupled with some MCS-bound back-payment money already in the budget, would get the City’s potential payoff amount up above $30 million. Cash is reportedly holding out for something close to $40 million.

It was not without reason that, in the day or two following the budget deal, Councilman Conrad went on something of a media tour, claiming victory for his series of downsizing and privatizing proposals. These were also itemized in an impressively expansive list circulated in an all-points email by self-appointed budget-and-pension watchdog Joe Saino.

Given the fact that there was only one dissenter to the 18-cent component of the budget deal (Jim Strickland, who regarded it as a tax increase, pure and simple), one has to wonder what it is that members like, say, Joe Brown, who had campaigned to the end for workers’ rights, thought they had got from the deal.

And why did AFSCME members, who had been so agitated earlier about the specter of immediate privatization, appear to seem relieved.? The buyout portion of the budget deal amounts to forced attrition of their union — a clear step in the direction of ultimate privatization —and they failed to get any binding future-tense promises from the Council or from Wharton (who said he had “no plans” to privatize, employing the most famous of all political circumlocutions).

The labor-management aspects of the budget dilemma have not gone away or been resolved. They will return to haunt the Council again next year, at which time AFSCME will find it has a significantly weaker hand to play.

And so, too, will the tax issue come back to plague the Council. Almost certainly, MCS will still exist in some form or another a year from now, and almost certainly, too, major money will still be owed a still adamant MCS by the City. The Council will be debating the 18-cent add-on, or some version thereof, in June of 2012.

What it comes down to is that, for the time being, in an election year for city government, an unstable city budget, still eminently rupture-ready, has had, by general agreement of mayor and Council members, not one but two symmetrically arranged bandaids pasted on.

The package may hold for the time being. The problem is that the two bandaids themselves may prove to be corrosive.

Comments (8)

Showing 1-8 of 8

Good one, JB.

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Posted by Wintermute on 06/24/2011 at 8:08 AM

Sausage-making 101. Well done, sir.

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Posted by BruceVanWyngarden on 06/24/2011 at 8:40 AM

Every citizen of Memphis and Shelby County should read this.

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Posted by mayfield on 06/24/2011 at 10:39 AM

Thanks for the article. Now that folks..is proper journalism.

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Posted by zebra on 06/24/2011 at 10:45 AM

Thanks for the K-Y Jelly, JB, but it's not likely to make what they're getting ready to do to us hurt any less.

This tax increase (is Strickland the only council person who took elementary arithmetic?) is going to be self-defeating, for reasons I mentioned in a comment to John Branston's earlier piece. I wonder whether voters will see fit to reciprocate this pain on those responsible for inflicting it. Given the combination of amnesia and masochism that seems to afflict Memphians every time we vote, I doubt it.



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Posted by M_Awesomeberg on 06/24/2011 at 4:05 PM

I am still lost with what the plan is going forward. If we want to install confidence in our local government, this is a strange way in going about it. It appears that we are grabbing at straws as a community.

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Posted by tomguleff on 06/24/2011 at 5:00 PM

Tom, what makes you think anyone in there has a plan?

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Posted by sbanbury on 06/25/2011 at 7:01 AM

It'd be worth something to have every council person publicly spell out exactly what he or she sees their 'end product' Memphis as. None of them would openly say, "How the &^%$ should I know? I'm just here for the power trip and the pension" or even, "We get rid of the (fill in some race or lifestyle) and raze the crappy houses. Then plant flowers near the airport. Then life will be good for everyone!" But that's what some of 'em are thinking.

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Posted by Alphalpha on 06/25/2011 at 6:49 PM
Showing 1-8 of 8

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