Shelby County Government has completed its annual duty to approve a budget and set the property tax rate prior to the July 1 beginning of the fiscal year.
In previous updates, I have written about the major issues at stake and the potential options available to us. Here’s what happened.
FY24 budget negotiation summary:
- Cut Mayor’s proposal by half
- Substantial spending cuts
- No property tax increase
- Establish public safety fund
- Staff up justice system
- Regional One + schools
- County Clerk investigation
Storm disruption
As I write this*, there are still 31,000 homes without power, a large concentration of them in Bartlett and Lakeland, my workplace included. I hope your service is restored soon. Many thanks to the linemen and first responders working to get the job done. [*First posted on social media Wednesday, June 28]
With all the connection disruptions this week, it has taken me a minute to compose this update and answer your questions. Here’s an overview.
Major factors
The FY24 county budget is dominated by two large building projects: Regional One and school construction, together accounting for more than $427 million.
I voted against both of these big ticket items, but they were approved by the board: up to $350 million for Regional One and $77.5 million for the Germantown High School replacement.
These projects were approved with no plan to pay for it. So the board directed the Harris administration to create a funding plan and add it to his budget proposal.
The county also faced a $27 million deficit driven by the state-imposed sales ratio, adding additional pressure to this budget.
Harris proposal
The Harris proposal included the two building projects, and many extras, paid for with a $50 wheel tax increase.
The mayor’s proposal also involved transforming Regional One from a county-owned property into a partnership with UT, setting the table for state-level matching funds.
State leaders, by the way, said a local commitment must be approved first before they will consider matching it.
The wheel tax requires 9 votes to pass. I voted against the Harris proposal, and it failed by one vote.
Wright alternative
My alternative was a cuts-only approach, with no tax increase. I proposed $45 million in cuts, reducing investment levels, and restructuring county spending.
My alternative only required 7 votes to pass, but it also failed by one vote.
I also supported additional efforts to avoid a tax increase, which failed by the same margin.
Sugarmon plan
That left one remaining path: a property tax increase. In the next meeting, Commissioner Sugarmon proposed a 30 cent property tax hike, taking it from $3.39 to $3.69. It would be the largest increase in 20 years. It would cover all of the items above, as well as $17.5 million in additional spending added by the board. This plan could be passed with just 7 votes.
To calculate what this plan would have cost you, add $75 for every $100,000 of your home’s appraised value. For example, a $300,000 home would have seen an increase of 3 x $75 = $225.
This alarmed taxpayers and top business leaders, who began calling me and asking me to reconsider the Harris plan. They told me our property tax rate is already too high and is a barrier to recruiting business and creating jobs in Shelby County.
New agreement
A 2nd reading of the wheel tax was already on the agenda, so that left room to craft an agreement and avoid a massive property tax increase. I did not support the Harris plan or the board’s added spending, but I was motivated to work toward the least costly plan possible.
Being the potential 9th vote gave me some leverage and allowed me to negotiate. For me to sign on, the majority would have to offer concessions.
First, I would cut the Harris proposal in half and eliminate any extras. The increase would be reduced to $25, and it would pay for the bare minimum.
Second, I insisted on spending cuts, all of which until that point had failed.
And third, there could be no property tax increase.
Difficult decision
This week, the board agreed to each of those conditions, and I made the decision to follow through with what remains a very difficult vote, having never supported any tax or fee.
My bottom line is this: which of the viable options will cost taxpayers the least?
My cuts-only approach did not have the votes to pass. So If I did not agree to $25, it would cost the average family almost 10 times more in property taxes. That was not a result I could sit on the sidelines and allow to happen.
Final thoughts
I don’t expect you to like the outcome. I don’t like it, either. But it was the best deal I could deliver considering the makeup of this board.
On the positive side, all of our municipal school systems will benefit from the capital budget. The new infusion of funding will allow them to take care of critical maintenance and construction needs. That’s why each of the municipal school superintendents and their boards encouraged our support.
And I am hopeful the state follows through with matching funds for Regional One and gives its blessing to the partnership with UT, so the area’s only level one trauma center can transform from a county property to a regional authority and an economic driver for Memphis, Shelby County and all of West Tennessee. This is why former county mayors, commissioners and leaders from the business and civic community sought our support.
Clerk investigation
I made one additional request during the budget negotiation. I said I wanted to launch an investigation into the County Clerk’s office.
The budget passed Wednesday; the investigation launched the next day.
When the Commercial Appeal reached out to me for comment on the investigation, I gave them the statement below.
“I am very pleased to see this step taken so that public confidence in the clerk’s office can be restored. This is something I pushed for during our budget negotiations, and I look forward to a fair and thorough process by our justice system.”