The Consolidation Conundrum



If you drive less than a mile from Southwind High School you can be in Germantown, Memphis, or unincorporated Shelby County (or Mississippi if you drive two miles). The tax rates where you end up vary from $4.06 to $7.22. Same stores, same roads, same public school, same water and sewer, same distance from downtown or the airport.

This is what the would-be architects of consolidated metro government are up against. The numbers are really ugly, and there's no way to spin it before the vote on November 2nd.

The Metro Charter Commission met Thursday evening at Southwind for nearly four hours and listened to half a dozen people make comments and ask questions. The panel's patience and dedication are admirable, but their task is staggering. The plan they finalize in the next 30 days must pass separate referendums in the city of Memphis and the rest of Shelby County outside of Memphis.

To this city of Memphis resident and consolidation proponent, it looks like the strategy, such as it is, is to appease the county residents with assurances of separate school systems, a three-year tax freeze, and suburban sovereignty and city residents with a three-year tax freeze that looks awfully shaky if the city continues to lose population. Everyone will be pitched on efficiency and a Greater Unified Memphis. And I expect there will be some frank talk, if not bald threats, that if this thing doesn't pass then some important people and companies might be oughta here. And I for one will believe them.

I see two main problems with the comparisons the charter panel is making between Memphis and Nashville and Louisville and Indianapolis and Jacksonville.

One is that three of those cities consolidated decades ago and their demographics were and are different. Nashville doesn't have the big differentials in tax rates between its "urban services district" ($4.13) and its general services district ($3.56) that we have between Memphis and, say, Collierville or Germantown or Lakeland. Its tax rate has gone down in the last 40 years because the city is phenomenally prosperous, among other reasons that may include consolidation. Louisville consolidated within this decade, but its black-white demographics are almost a mirror image of Memphis. Highlighting that difference might be counterproductive to consolidation proponents.

And the fact that Nashville, Indianapolis, etc. have lower tax rates than Memphis and are therefore more attractive to families, mobile job seekers, and businesses begs the comparison between Memphis and its suburbs. Why would you want to live in the Richwood subdivision near Southwind High School, which was annexed by Memphis and pay $7.22, when you could live literally across the street from the high school and pay $4.06? Or in Germantown and pay $5.48?

Or, in the most outrageous inequity of all, in the plush Southwind gated community a mile north of the high school and pay no city taxes because your residents had enough political clout to talk their way out of a half-hearted annexation push in 2006 and forestall the day, supposedly, until 2013? So did Windyke. Under consolidation, annexation would require a yes vote from the majority of residents in the annexation target. I don't see that happening if Memphis comes courting.

What I fear, instead, is Memphis continuing to lose its tax base not just because Nashville has more appeal and lower taxes but because our own suburbs, incorporated or not, have more appeal, more stores, more work places, more solvable problems, more private and high-performing public schools, AND lower taxes.

I believe in Freakonomics but I don't see how this flies. The suburban mayors and their residents have been appeased so much that I am not even sure it is a good deal, strictly from a tax perspective, for Memphis residents although I buy the "one voice" argument.

To put it bluntly: Tax freeze? No thanks. I want a tax cut to go with my pay cut, and I want it soon.

Southwind High School is the issue in a nutshell. It is a county school that, by agreement with the Memphis school board a few years ago, is supposed to become a city school at some uncertain annexation date. With annexation off the table nobody knows what becomes of it and its 1600 or so students. The question did not come up Thursday, and certainly not the answer.

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