The Memphis City Council wouldn’t entertain the idea of raising taxes Tuesday like the Moral Budget Coalition wanted, but coalition members cherish what they see as “baby steps.”
The Memphis City Council set a $2.71 property tax rate per $100 of assessed value, which is the recertified rate, meaning the average property owner won’t see a tax increase due to the 2021 reassessment of property values. State law requires the city to lower to such a rate before making further adjustments.
Councilman Martavius Jones proposed setting the rate 31 cents above the recertified number, which is 17 cents below the current rate of 3.19. His proposal would have translated to $40.3 million in extra taxes Jones wanted to spend on trash services, affordable housing, and the Memphis Area Transit Authority.
The median value of an owner-occupied home in Shelby County is $150,400, census data shows, which means that the typical homeowner would have paid an additional $116 per year in property taxes under Jones’ plan.
But no other council member supported him, as eight members voted no and two abstained in the vote to add the item to Tuesday evening’s agenda.
“We still will have a trashy, dirty city because there’s not additional revenues to take care of it,” Jones said. “This was not the first time I’ve stood alone, and I guarantee you it probably won’t be the last time I stand alone. But that’s not going to stop me from doing what I feel is in the best interest [of the city].”
The coalition first presented its “moral budget” last month, asking city and county officials to maintain the current tax rate as property values are up in the county. The $140 million surplus would go toward public education, public transportation, affordable housing, support for people experiencing homelessness and other efforts to support workers and young people.
The coalition contends budgets indicate the moral priorities of government, echoing the principles of the Poor People’s Campaign: A National Call for Moral Revival, which is making a similar call for economic justice to federal lawmakers.
Jones’ proposal was not discussed by the council Tuesday evening, beyond his reasoning for it. When he proposed adding a resolution to Tuesday’s agenda that would have notified the public of a potential tax increase — a necessary step under state law before an increase can be enacted — councilman Worth Morgan objected to the addition. The council then sided with Morgan’s objection in the aforementioned 1-8 vote.
Councilman J.B. Smiley, who abstained, agreed that a tax raise is necessary to bolster city services like trash collection but said the public support is currently insufficient.
“If you ask people about their thoughts on city services, they’re going to tell you they think it’s poor,” Smiley said. “But those same people who said city service is poor will also say they don’t want a tax increase … When you have issues so polarizing as a tax increase, you have to have the will of the people to support it.”
The coalition rallied last month in front of the Vasco A. Smith Jr. County Administration Building, asking for funding from both the city and county’s coffers and their allocations from the American Rescue Plan Act. The total ask was $65 million from the city and $102.3 million from the county.
Although the coalition struck out with the council, county officials made some adjustments in their favor.
Last week, the Shelby County Board of Commissioners placed the tax rate a penny above the recertified rate of $4.04 and budgeted an additional $1.3 million for the Memphis Area Transit Authority and $2.3 million for mental health services. The coalition originally requested $10 million for MATA and $1.5 million for mental health in funding from the county.
Cardell Orrin, Tennessee executive director of a coalition organization, Stand for Children, said the decision not to discuss the item was “terrible.”
It’s “clearly disappointing to not even allow the opportunity for it to be considered after all the times they’ve rushed stuff through for the business community,” Orrin said.
But he resolved that the coalition’s small victories from the county and introducing the idea to the city is a “baby step” in the right direction and said the group will begin planning for the next budget season.
“If (we didn’t) change the conversation, we added another note to the conversation, we added another community voice to the conversation,” Orrin said.
An extra $161 million to spend?
While the city won’t be increasing the amount of money it receives in taxes, it has received a little over $80 million from the American Rescue Plan Act of 2021 and is slated to receive another $80 million from it at a later date.
Only $16 million of this money was allocated as part of Tuesday’s proceedings, meaning the council and city administration will be able to spend the rest over the next couple of years.
Jones proposed in a committee meeting Tuesday morning that $25.7 million of the funds be spent as quickly as possible to help certain local nonprofits, tourist attractions, and small businesses.
The largest portion would be a $10 million allotment to small businesses that would agree to give cash payments or bonuses to employees returning to work. He said he spoke with the president of the Memphis Restaurant Association and two other restaurant owners about the problems they’re facing finding workers. Those conversations inspired the measure, which he argued would help local businesses draw unemployed Memphians back into the labor market.
“We know that finding people to fill these positions has been hard during this time. This would act as almost an incentive plan for those people that have returned to work,” Jones said.
As for funding tourist attractions, Jones argued the city should help the organizations that fill the city’s hotels — therefore generating hotel tax revenues for the city.
“We should support those organizations and events that are sources of revenue,” he said.
Jones’ overall proposal — and especially his specific proposal to help small businesses recruit workers — received support from multiple other council members. However, administration officials asked that the council wait on approving the proposal until the federal government provides more guidance on how ARPA funds should be used.
Council members Chase Carlisle, Patrice Robinson, and Morgan spoke up in support of delaying Jones’ proposal so they and the administration could spend more time studying federal guidelines and considering ways to spend the money before the large amount of cash is doled out.
The body decided to table the item, saying they’d pick it back up in July.
Carrington J. Tatum is a corps member with Report for America, a national service program that places journalists in local newsrooms. Email him at firstname.lastname@example.org
Jacob Steimer is a corps member with Report for America, a national service program that places journalists in local newsrooms. Email him at Jacob.Steimer@mlk50.com
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