Now that the chief administrative officers have fired off letters claiming that the other one’s government owes his government money, let’s hope they now schedule a time to get in the same room and talk seriously about the tax equity issues that bedevil Memphis taxpayers.
In fact, it’s been a good week to remember that there’s just no substitute for good, old-fashioned communications, which has seemed so often to be a missing part of our civic culture.
First, there was the letter from Shelby CAO Jim Huntzicker to Memphis’ finance director claiming that city government has shortchanged county government by $125 million in the payment-in-lieu-of-tax payments that Memphis Light, Gas & Water Division makes to Shelby County Government. It seemed most of all to be the return volley for Memphis CAO Keith McGee’s letter a couple of months ago suggesting that city government would no longer provide $14 million in funding to the Memphis and Shelby County Health Department.
Answering The Right Question
While all of this makes for interesting political theater, it makes for little else. Now that each government has staked out its territory, it’s past time for city and county governments to meet and begin the long overdue discussions to answer the fundamental question that has eluded us for 30 years: what is a city service that should be funded by taxpayers of Memphis and what is a regional, or county, service that should be funded by taxpayers of Shelby County?
The present problem is not of either CAO’s making. Long before either of them took up their posts, Memphis and Shelby County governments, with the best of intentions, tried to consolidate many of its services and its programs. Unfortunately, its byproduct was that both governments funded these services, producing an inequitable tax burden for the citizens of Memphis.
For example, for a project like The Pyramid, where the Memphis and Shelby County halved the cost of the building, Memphians at the time actually didn’t pay half. Because they paid 100% of the city’s half and 80% of the county’s half, they were in truth paying 90% of the building’s cost. The same goes for the other departments, agencies, programs and projects in which the governments were (and are) full partners.
It’s Tax Equity, Stupid
That’s why we hope the recent letter-writing doesn’t degenerate into one of those political battles about who looks best or one of those legal battles about whose contractual rights are strongest. If it is, the majority of Shelby Countians – the people living inside Memphis – will have been ill-served by their elected officials in both governments.
Some Shelby Countians like Bartlett Mayor Keith McDonald will undoubtedly continue to contend that Memphians should pay twice because so many of the social, health and judicial services are frequented by Memphians more than non-Memphians. But that misses the point. This isn’t about who uses the services most and it’s not about where the services are located.
No, more to the point, it’s about tax equity. It’s a fundamental principle of American democracy that taxes are redistributed in a way that results in affluent areas supporting services needed by less affluent areas. It’s the same in Shelby County. This isn’t about who uses services the most. It’s about regional services – such as health, planning, arenas and museums – being placed on the largest tax base, the regional county one, so that Memphians pay an equitable tax burden.
As long as the playing field is so uneven for Memphians, who pay twice for services like schools and health while taxpayers in Germantown pay for them once, our city has a barrier to any programs to attract and retain the middle class and talent. There’s just no logic to the proposition that a family can move from Memphis to the unincorporated area or any other city in Shelby County and receive a tax break of several thousand dollars.
It’s not that these cities and county government are more efficient. Their lower tax rates are simply the result of Memphians paying for services that are in truth more regional than municipal.
Memphis and Shelby County have talked and talked and talked for two decades about negotiating a tax structure that is fairer and a tax burden that is equitable for all Shelby Countians. The idea surfaced again a few months ago after the city’s letter about Health Department funding and it was suggested that city and county decision-makers would begin discussions on this issue.
West Memphis Goes East
Hopefully, it wasn’t the same sort of idle talk that has characterized this question for so long, and that soon, someone will pick up the phone and dial the other and Mr. McGee and Mr. Huntzicker will have the kind of serious, deliberative conversations that can mean so much to the future of our city. In fact, that alone should be reason enough to put it at the top of the priority list for Shelby County.
While we have made no secret of our belief that a number of services should be moved to the county’s tax base, we suspect that most people in our city are like us – open-minded but hopeful that something substantive will take place to help Memphians.
Speaking of communications, we were intrigued by a news report that the West Memphis economic development director has been touring China to build business ties with the emerging Asian economic power house. Our first thought was that the Greater Memphis Chamber and our local government have made the same trek, and we suspect that officials from Northern Mississippi have been part of a similar mission.
Sinking Or Swimming Together
It seems reasonable that all economic development officials should join hands and work together to tout the benefits of doing business with and in our region. As long as we operate on the principle that Memphis and Shelby County have to compete with DeSoto County (mentioned recently as the basis for loosening up the policy for tax freezes here) or that West Memphis operates on the theory that they somehow can sell their city without selling ours as well, we’re not engaging more in wishful thinking than economic development.
It’s counterintuitive to us that the various parts of our region can’t set aside jealousies and rivalries long enough to establish a shared plan and a mutual message to the world. Somehow, the notion that our neighbors across the river seriously believe that their motto, “Turn to West Memphis,” will identify the beleaguered city as a manufacturing and logistics dynamo seems as baseless as the idea that Memphis shouldn’t be selling the assets of our entire region to anyone who will listen.
Meanwhile, we were encouraged by an op-ed column in The Commercial Appeal by Robert L. Barber, Hernando planning director, who made a persuasive case for regional cooperation. It’s so rare for that kind of message to be coming from south of our border. Unfortunately, regionalism here (and in many other cities) results in the hub city reaching out to the region with little of the interest and commitment reciprocated on.
But Mr. Barber makes the wise point that the current economic meltdown should be used as the impetus to think differently and to create a “common effort for the region’s advancement.” He suggested that perhaps the development of the I-269 corridor should be the vehicle for this new thinking so that it’s not just the vehicle for more unbridled sprawl and runaway development.
In particular, he said that we should think about regional assets like a continuous, interconnected network of greenways, and added that the “destructive nature of development sprawl, the enormous importance of environmental preservation to community health, and many of the ingredients and methods for developing technology-driven economic activity” should be regional priorities.
To this end, he wrote about the importance of “creating and preserving mixed use, pedestrian-friend neighborhoods with a variety of housing and transportation choices, preserved open spaces, and broad community collaboration, among others.”
Plan Now Or Pay Later
We can’t remember when a suburban voice has so eloquently defined the value of smart growth and sustainability. While it is unfortunate that I-269 – the poster child for wasteful spending and developer influence in public works decisions – is the trigger for this level of concern and commitment, Mr. Barber’s comments are welcome nonetheless.
Here’s the thing: anyone familiar with the political machinations that produced I-269 knows that there is little justification to it, except for the political payback by U.S. Senator Trent Lott to powerful political insiders. As we have said several times, the interstate should be our region’s first toll road, with revenues mitigating the negative financial impact on the urban health of our region.
That said, I-269 is a fact of life, and its impact can be profound and transformational. Apparently, because it is widely seen as the antithesis of smart growth and a vehicle for greater and more destructive sprawl, we have been in denial as a community. As a result, there has been no planning for the corridor and the development that it will attract.
To Mr. Barber’s point, it would be good if we do that sooner rather than later. After all, we already know what later looks like.