Posted on 07/03/2003 5:37:12 AM PDT by GailA
32cent property tax hike on table Plus a nickel outside city to fund Arlington school
By Michael Erskine erskine@gomemphis.com July 3, 2003
Shelby County Commissioners struck a deal Wednesday that will send to the floor a 32-cent property tax increase to balance the county books, paired with funding for a new high school in Arlington.
The school project would be paid for with rural school bonds requiring an additional 5-cent tax increase charged only to residents outside the Memphis city limits. The unprecedented funding approach for Shelby County would sidestep the ADA (average daily attendance) funding formula, a large factor behind the county's mounting $1.5 billion debt. The ADA has traditionally been used to give a portion of capital funding to Memphis City Schools for every county school construction project.
The overall county property tax rate of $3.79 per $100 of assessed value would increase to $4.11, costing the owner of a $150,000 home in Memphis an extra $120 per year. County residents footing the extra five cents for the Arlington school would pay about $139 in new county property taxes in the new fiscal year, which started Tuesday.
The proposed 32-cent increase breaks down like this: 21 cents for general government operations, 7 cents for debt payments and 4 cents for school operations.
With the 5 cents for Arlington, the combined 37-cent increase represents the largest hike possible requiring a simple majority of seven votes. Anything larger than a 10 percent hike would take nine votes.
The rural school bonds are expected to generate $29.8 million to help finance the $39 million high school. The extra five cents on the tax rate could be lowered or even eliminated in the coming years if the county school system receives payment from the city system for schools transferred through annexation.
With no opposition from Mayor A C Wharton, five of the commission's six Democrats, as well as Republican Tom Moss, agreed to the proposal in a 6-6 budget hearing vote on Wednesday, sending it without recommendation to the full commission for a vote on Monday. Commissioner Julian Bolton, the sixth Democrat, was absent and could not be reached later.
The commission had been facing a proposed 43-cent increase from Wharton needed to balance county government's revenue-starved operating and debt service budgets.
In recent weeks, the roughly $300 million general operating budget proposal had been trimmed by nearly $18 million.
Despite the tax hike, the plan would still require layoffs. In the administration alone, the plan would eliminate 150 jobs - about 75 filled positions and 75 vacant ones, said James Huntzicker, director of administration and finance.
The sheriff's office and other elected officials would have to lay off additional workers, possibly resulting in more than 300 total lost jobs.
County employees would receive no pay raise under the proposal, which also severely cuts grant money typically awarded to local nonprofits. The budget plan, however, would provide about $3 million to keep open the county's beleaguered nursing home, Oakville Health Care Center, which had been targeted for closure.
The biggest fuss on Wednesday, however, was over the deal expected to net the Democrats a seventh vote on Monday.
Moss drew the consternation of many of his Republican colleagues by siding with the Democrats, agreeing to the tax hike paired with the Arlington school funding.
He said later that he was resigned to the fact of a tax increase. He said he made it clear in behind-the-scenes talks that any tax hike proposal must include funds for the desperately needed school if it were to receive his vote.
"If we were going to have to have a tax increase, which we were. . . . I walked away from it with something in my hand, vs. last year, voting against a tax increase, and that's what I got," Moss said.
Several other Republican commissioners, who had fought for months to secure funding for the Arlington school, voted against the deal, saying the overall tax increase was too large. They called for further cuts in the county's operating budget.
"We're in effect trading a school . . . for a tax increase," said David Lillard, the school project's most vocal supporter. "I don't think that's an appropriate trade."
Chairman Walter Bailey, who initiated discussion on the proposal Wednesday, had in fact been one of the Arlington school's most vocal critics. But Bailey said he knew a compromise needed to be reached.
"You've got to give and take in politics," Bailey said, smiling, following the meeting. He said he was confident the proposal would be approved Monday.
- Michael Erskine: 529-5857
TN TAX REVOLT has the contact info and fax info in a flyer you can print out and distribute
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