"The legislative power of the city shall be vested in the Council which shall have all legislative powers heretofore exercised by the Board of Commissioners, including but not limited to, the right to fix the tax rate and to approve and adopt all budgets." This authority over the city's purse strings, granted by the Memphis City Charter (Article 5, Section 16), is the most important power granted to the City Council.
In fact, the council has line-item authority over the budget — though this authority has rarely been used by past councils. The current council has, however, broken with tradition on other issues and hopefully will decide this month to flex its authority over the proposed budget.
In Article 6, Section 40.1, the charter provides some details: "The operations and capital fund budgets of the City ... shall be prepared and submitted by the mayor with the assistance of the directors, and presented to the council, which shall approve or amend any and all budgets prior to the adoption of a tax rate as now provided, and said budgets as approved or as amended shall be the duly established budgets. The comptroller shall under no circumstances make disbursements not specifically provided for in any of the aforesaid budgets as finally approved by the council."
Again: The mayor may propose budgets, but it is the council that approves — or has the right to approve — "the duly established budgets." Consistent with the council's line-item authority, the administration cannot change any appropriation after the council establishes the budget. Traditionally, as we know, the council has waived this authority.
It is no secret that the world is in a recession. Most governments, businesses, and families in our country have less income than they did two or three years ago.
Last year, FedEx reduced the salaries of its highest earners. Earlier this year, it laid off thousands of workers. Last week, Governor Bredesen proposed 1,051 state layoffs, and Metro Nashville reduced the hours of its libraries and community centers.
By contrast, some two months ago, Mayor Herenton announced what he described as a balanced budget with no layoffs and a 3 percent raise for all city employees. In reality, this "balanced budget" ignored a court ruling to provide additional funding to the city schools next year up to $57 million.
Like the rest of the country, Memphis must make drastic reductions in spending. Many of us on the council refuse to raise taxes; our combined city and county property tax rate is already twice as high as that of Nashville, which has the state's second highest tax rate.
Besides the recent recession and the court's order on school funding (which has been appealed), Memphis is also challenged with a long-term population decrease and an economy that, even pre-recession, was static.
The City Council has been reviewing the mayor's proposed budget for six weeks and must make a decision by June 30th. The debate has ranged from a couple of council members pushing for no spending reductions to others, including me, trying to eliminate the raises and employment positions added in the last three years.
The majority of the budget committee has consistently rejected the notion of rolling back the raises. They argue that raises were withheld several years ago when the city administration grossly overestimated revenue, thereby creating a budgetary crisis.
Our current economic realities require drastic change. To date, the budget committee has reviewed about two-thirds of the proposed budget but has only reduced spending by about $6 million. We must do more.
Remembering that about 70 percent of the budget is personnel, we must reduce administrative staff. Eliminating the 3 percent raise would by itself save no less than $11 million. We can also eliminate most "company cars" and even address the issue of employment benefits.
Perhaps some city services can stand to be altered, but — importantly — no cuts must be made to public safety.
All we have to do to meet the challenges of this budget — while maintaining essential city services and avoiding a tax increase — is to make the kinds of tough decisions that most businesses and families have already made.
Lawyer Jim Strickland is a first-term member of the Memphis City Council.