More often than not, local government budgeting has become all about hitting a target.
It’s about forcing budgets to conform to a property tax rate that is often agreed upon before budget hearings even begin. As a result, budget meetings are about hitting the property tax target rather than discussing what kind of city Memphis should be and what it would cost to make that happen.
Because those kinds of conversations don’t take place, the development of budgets are regularly more about politics than policies. That’s why city budgets are skewed toward public safety (police and fire departments), which amounts 60.3% of the total operating budget, or $391 million. By way of comparison, the total amount of property taxes and sales taxes in the operating budget is $381 million.
Although there is no clear correlation between the number of police officers and cities’ crime rates, there is nothing harder for elected officials to do than resisting the call for more money for police. That’s certainly true in Memphis, where the police department budget has grown by 23 percent since 2008.
In New York City, crime rates have dramatically dropped even as the size of the police force was cut, because the administration of Mayor Michael Bloomberg decided that interventions should have as much prominence as arrests. It’s a philosophy that Shelby County Mayor Mark Luttrell, when he was sheriff, advocated for Memphis. He said suppression (arrests) is the easiest thing to do, but it’s prevention and intervention – the other two legs of what he called the three-legs of crime fighting – that deserve equal attention.
City budgets are like the laws of motion: every action – an increase in money for public safety – has an equal and opposite reaction – a reduction in money for neighborhood-based services like libraries, parks, community centers, public transit, and blight removal. As a result, when compared to its peer cities, Memphis is on the lowest rungs for funding these services.
For example, Memphis provides $23 in per capita funding for libraries compared to $35 in Atlanta, $37 in Nashville, $74 in Birmingham, and $78 in St. Louis. City funding for public transit falls below its peers, and in a ranking of 88 cities for per capita park funding, Memphis is next to last with per capita funding of $27, compared to the overall average of $82.
Contrary to public opinion, talking points, and commenters to newspaper websites, City of Memphis ranks high on efficiency and productivity rankings, largely because it is delivering services at low per capita costs and doing it with a property tax rate that has been reduced from $3.43 in 2006 to its present $3.11.
The Price Tag
In other words, despite conventional wisdom, Memphis services come up wanting, but not because of mismanagement or waste. Rather, they are simply underfunded.
To move up toward the middle of the funding levels of comparable cities, Memphis needs about $35 million more for parks, public transit, libraries, and community centers.
All of this need for more funding comes in a context when for the first time in modern history, the Memphis property tax rate will rise as a result of reappraisal. Tennessee’s “Truth in Taxation” law requires for the reappraisal to be “revenue neutral” for local government, meaning that central to the law is setting a certified property tax rate after reappraisal that produces the same amount of revenue as before reappraisal.
Tradition is turned upside down this year following years of property value declines. Put simply, when values go up, the tax rate goes down, but this year, with values going down, the certified tax rate will have to go up although it will not result in more property tax revenues for city governments. This week, city officials estimated that the new certified rate would result in a 14 cent increase.
As for the much-needed increase in the budgets for libraries, community centers, parks, and public transit, Memphis City Council is blessed with some reasonable options that can be mixed and matched to come up with the $35 million (but only if it doesn’t get too obsessed with a property tax decrease this year):
* A cut of eight percent in the total budget for police and fire departments equals $35 million.
* Passage of a sales tax increase with funding allocated to the improvement of public services.
* An increase in city fees which are in serious need for updating.
* Cutting tax freezes in the PILOT program by half would free up $20 million.
* A 15 cent increase in property tax rate would produce $15 million.
Investing in the Future
We know how hard it is to resist the political siren’s call of lower taxes and budget cutting, but the “cut, cut, cut” approach is seriously in need of replacement with an “invest, invest, invest” approach.
Today, the consequences of a budget-cutting only philosophy are all around us. There is no money for planners or a much-needed comprehensive plan for Memphis. A community centers sometimes has only two employees operating it, library hours have been cut by 20 percent and there are science books on its shelves that don’t have the right number of planets in the solar system because they are so outdated, the condition of city buses drives away middle class riders, and city parks have declined from when they were considered one of the best systems in the nation a decade ago to one where it’s been suggested that the grass may only be cut once a year.
These days, cutting budgets is often a proxy for efficiency. That’s no longer the case because more and more, it’s the budget cuts themselves that are causing inefficiency. They have reduced funding that reduced (and even damaged) vital services, they have cut the workers who delivered the services themselves, and they have reduced access for the public to the very services that make a big difference in the lives of Memphians.
City Services Matter
Here’s the thing: City of Memphis services matter. But what matters most of all is that they are effective, accessible, and responsive, which is what a progressive, high-performing government delivers.
None of us should envy the challenges facing Memphis City Council. In the best of years, it is a thankless job undervalued and over-criticized by the public. Hopefully, this year, as it takes up its budget deliberations, it will turn its attention to guaranteeing that its basic services are effective and responsive to the needs of all Memphis neighborhoods.
It does not have to happen in one year, but it’s time to create and set in motion a real plan for adequately funding city services, even if it takes several years.