It’s the political equivalent of no good deed going unpunished.

That’s the moral of the Memphis City Council’s attempt to bring reason to the city’s inequitable tax burden.  But the Tennessee Supreme Court isn’t known for its legal courage, so instead of hearing arguments on this core question, it ducked.  It declined to take up the city’s appeal of a lower court ruling.

Over the years, Memphis City Council increased funding for Memphis City School and was told they had no obligation to do it.  Over the years, Memphis City Schools treated their requests as one year requests and often even referred to them as special funding. 

Over the years, particularly in the wake of the “tiny town” controversy, City of Memphis wanted Shelby County to assume responsibility for its school funding, but the county wrote back that city government should just stop appropriating the money since it was discretionary.

Over the years, when a city mayor said that county government should be funding schools, the response from the county mayor was that if the city didn’t want to fund them, it should just stop.  Over the years, if Memphis City Council knew that it was making immovable decisions on school funding, it never would have increased it as much.

Historic Irrelevancy

All that is now prologue, because all that has gone before is irrelevant to the courts.  Context, history and practice ended up meaning little and it all began with a ruling by Chancery Court Judge Kenny Armstrong.  Chancery Court is called a “court of equity,” but in the case of tax equity, there’s been no relief for Memphians.

As a result, in city government, it’s now all about finding $57 million in a city budget inherited by the Wharton Administration that was already held together by gum and baling wire.  And it could be even worse next year.   

We have been unabashed fans of the City Council for its action to equalize taxes and eliminate duplicate funding for services that are ultimately the province of Shelby County Government.  As we said at the time, we wished that the money at issue had been set aside in the event of a legal reversal of fortunes or that instead, the city property tax rate had been decreased roughly 50 cents.  That said, most people in city and county governments expected the City of Memphis to prevail.

Since the action by the Council, we’ve witnessed a great deal of saber-rattling by lawyers for both sides, but at this point, we hope that the Memphis City Schools legal team will give the over-the-top comments a rest.  For too long, to the lawyers, it’s seemed that it’s been more about winning than about finding an answer that represented the best interests of  Memphians, particularly since Memphis City Schools’ budget and workforce dwarves city government. 

Who Hurts the Most?

When Willie W. Herenton left Memphis City Schools as its superintendent following his election as Memphis mayor, the City of Memphis budget that he inherited was just slightly smaller than the one he managed at the school district.

When he left office 18 years later, City of Memphis budget had increased about 45%, which corresponded roughly with the rate of inflation.  Memphis City Schools budget had increased about 125%.  As for employees, the number of fulltime city workers remained relatively flat during the terms of the Herenton Administration, but employees at Memphis City Schools increased about 50%.

What makes the numbers so startling is that city government and city schools did not see an increase in the number of people they were serving.  The population of Memphis was about the same (due to annexation) and the number of students in Memphis City Schools was about 5,000 fewer.

Shroud of Memphis

Enrollment numbers for Memphis City Schools have been shrouded in as much mystery as Papal elections, and they have wildly fluctuated over the years, often in patterns that bore no resemblance to demographic trends.  For example, at the dawning of the 21st century, the district was claiming to have more than 130,000 students although common sense and basic addition led to a wink and a smile when anyone at the mother ship on Avery was asked for explanations.  Everyone knew the number was substantially less.

State education officials were told that the spike was caused by the annexation of Hickory Hill, but two years later, the number had spiraled down by 12,000 students.  Of course, the higher the enrollment, the more funding that flows down from state government, so the philosophy in those days was always to err on the high side.

This is no insignificant matter.  That’s why City Councilman Shea Flinn is so insistent about getting an accurate audit of the actual enrollment, and we hope that all sides can agree to cooperate with it.

Despite the decrease in students and the climbing budgets, there are still some who act as if Memphis City Council is derelict in its duties to suggest that tax fairness comes first and that all school funding should be where it belongs – on Shelby County Government, constitutionally required to fund all public school students.

As the Flyer’s John Branston has pointed out, there was a $75 million discrepancy in the Court of Appeals ruling itself, a total that outstrips the amount at issue in the lawsuit.

“Call it ‘The Case of the Missing 7,000 Students.’  But you don’t have to be Sherlock Holmes to figure this one out.  The Tennessee Court of Appeals make a shocker of an error in its decision this week on the funding for Memphis City Schools.  If you do the math, it comes out to $75 million in schools expenses and that’s an amount that should get members of Memphis City Council doing some homework before raising anyone’s taxes or forking over millions of dollars to MCS.

“On the second page of its ruling, the court says MCS ‘serves approximately 112,000 students.’ No, it does not. According to MCS, the system serves “about 105,000″ students. The Tennessee Report Card says the actual number is 104,829 students. School funding is determined by enrollment. The per-pupil funding (from all sources) for MCS is $10,394. Multiply that by 7,171 — the difference between the actual enrollment and the number the appeals court wrongly assumes to be accurate — and the result is approximately $75 million.”

Fairness For The Future

In addition, it’s not fair to default into the “children are our future” rhetoric when talking about City Council, because some things are even more fundamental for government to function well: tax fairness and fair play.

No one is suggesting that it’s not in all of our best interests – not to mention our common humanity – to pay for the education of our children. It does in fact take a village and we all need to be villagers in that pursuit.

But the village doesn’t only have children. (In fact 75% of our village doesn’t have any.)  It has elderly people, especially the significant percentage here who live in poverty, it needs an economy that doesn’t play down to our low skill levels but helps to improve them, and it’s about neighborhoods that are connected, walkable and served by high-quality public transit.

In other words, the village is about more than one priority or one group of people.

Lewis Carroll Financing

O.K., we’ve belabored the village analogy to the breaking point, but what we are suggesting is that there is no logic – legal or otherwise – that justifies why Memphians have to pay twice for public education while every one else in Shelby County pays once.

Let’s say it again. No property tax money from the City of Germantown, Collierville, Bartlett, Millington and Arlington go to fund schools. Meanwhile, Memphians not only pay for schools in their county property tax bill, but they pay for it again with their city taxes. No one else in this county does that – or has ever done that – except Memphians.

It paints a potential scenario in which Memphians – with their array of social and human service needs – see those programs shrink because of the Council’s inability to balance city priorities and school funding has a stranglehold on a big part of the city budget.

It makes no sense (and surely there should be some good sense in the law) that Memphis taxpayers, through a Memphis City Council courageous enough to tackle this tax equity problem head-on, lose all rights to determine its priorities, its ability to pay for services and to align priorities to funding and ultimately, to have the ultimate flexibility to move around money in its budgets in times of crisis.

Here’s the problem: because of our state’s regressive tax structure and our anomalous bulge in children, all public services are fighting over a pie whose size is fixed and so every agency feels compelled to fight for its share. It’s a flawed system destined to breed conflict and produce political dogfights.  That’s the biggest shame of all.