On Eve of Budget Talks, Strickland Warns against Property Tax Increase

Budget chairman of Memphis City Council calls for public participation in “line by Line” search for cuts in city budget.

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Strickland at Dutch Treat Luncheon
  • JB
  • Strickland at Dutch Treat Luncheon
That proposal made by City Councilmen Jim Strickland and Shea Flinn for a sales tax referendum, coupled with a reduction in the city’s property tax rate? It’s on indefinite hold, destined to remain there permanently if Mayor A C Wharton is able to convince the City Council to raise the property tax rate in budget negotiations about to get under way.

That was the word from Strickland, the featured speaker Saturday at the monthly Dutch Treat Luncheon, a surviving spinoff of the old Loeb Dutch Treat Luncheons once presided over by former Mayor Henry Loeb and by the late Charley Peete, who took them over after Loeb’s death.

As in Loeb’s time and Peete’s, the attendees tend to be arch-conservative or seriously libertarian, and Strickland, who boasted at Saturday’s meeting at Pancho’s Restaurant on White Station that he was “the only Council member who has never voted for a tax increase, not one,” was well received. When one woman gave voice to a common assumption that Strickland intends a mayoral race at some point, the Councilman merely gave a faint smile, as if in confirmation.

As he has on other occasions, Strickland expressed a concern that the greatest danger facing Memphis is that of population loss. "People are voting with their tail-lights,' he said. He attributed the problem to people’s anxieties about three areas — crime, education, and taxes. For the most part, he confined his remarks to crime and taxes, both of which, unlike schools, he said he as a Council member had some direct responsibility for.

Strickland seemed guardedly optimistic about crime control in Memphis. He said the city’s crime rate had declined in recent years under the influence of “Blue Crush” tactics, first introduced by former police director Larry Godwin after the model of an approach by former New York Mayor Rudy Giuliani that located an increased police presence in statistically high crime areas.

According to Strickland, there was a bit of a relapse after Godwin’s departure in 20111 to become a deputy to state Safety Commissioner Bill Gibbons and as new police director Toney Armstrong took up the reins. Members of the Council noted a 10 percent increase in crime under a new, modified policy instituted by Armstrong “that did away with the biggest part of Blue Crush.” Things have since stabilized as Armstrong has begun to restore the former policy. “Blue Crush works,” Strickland said.

Turning to budgetary matters, Strickland, who chairs the Council’s budget committee, told his audience they “probably won’t believe it,” but the city’s tax rate has in recent years decreased by about 10 percent. He reminded them that the amount of property tax paid is a combination of two elements, “the tax rate and the value of your homes.”

Inasmuch as the most recent assessment shows a dramatic downturn in property values for most Memphians, he said, there is pressure to increase the tax rate so as to maintain revenue. Hence, a budget proposal from Wharton last week calling for an increase from a $3.11 rate to one of $3.39.

Strickland noted that the combined city and county tax rates for Memphians are already 50 percent higher than the property tax rates imposed by Nashville Metro government. Given that the county rate is going to go up, largely because of the unanticipated transitional costs of school consolidation, Strickland forecast the possibility that local tax rates could increase to a level 75 percent higher than Nashville’s.

He further noted that Mayor Wharton’s proposed budget would spend $622 million, an increase over last year’s budget of $597 million and said, “We need to reverse that.” The bottom line, said Strickland, was that “we have to spend less.”

The problem is one of where to cut, and Strickland made known his preference for maintaining projected expenditures for pre-K education. “Pre-K works,” said Strickland. “If Pre-K didn’t work, I wouldn’t have sent my kids to Pre-K.” He said statistics demonstrate that Pre-K instruction causes literacy rates among children to rise dramatically.

Strickland said some of the remedies frequently called for (and expressed by members of his audience on Saturday) would have no effect on the tax rate per se. Included in that category were the idea of privatizing city sanitation services, which are subsidized by fees, not taxes, and proposed pension reforms involving a change from a defined-benefits system to a defined contribution (or 401-K) system. Strickland agreed that pension reform needed to be discussed, but he argued that an immediate switch “would not save tax dollars” and that there were would be transitional costs involved in maintaining the city pension fund.

As an example of the kind of thing that might be cut, Strickland mentioned the Memphis Music Commission, the work of which is paralleled by the privately funded Memphis Music Foundation, “which probably does it better.”

An aspect of Wharton’s proposed budget that Strickland did not specifically discuss but one which may be featured in budget deliberations next week is the mayor’s call for a 2.3 percent pay raise for all city employees to take place in January as a start in restoring a 4.6 percent pay cut imposed on city employees two years ago.

“We need to go over the budget line by line” looking for opportunities to cut, Strickland said, and he called for public participation in the process of looking for reductions, noting that the facts and figures of the budget process are available for inspection on the city’s website, memphistn.gov.

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