The facts have been presented before on this website and it’s probably foolhardy for me to try to convince people in Memphis and Shelby County that much of what they believe about the county’s wheel tax is not correct.As the time neared for the Nov. 21 city referendum on a half-cent increase in the local sales tax, people on both sides of the issue cited the wheel tax.

A proponent of the tax increase to fund a pre-K effort and possible city property tax reduction said the proposal had been carefully drafted to avoid what happened with the wheel tax.

An opponent said the wheel tax was adopted with a promise that the revenue would go for schools and then the money was used for something else.

The proposed sales tax increase was rejected overwhelmingly by voters.

The wheel tax will probably come up again in the future when another effort is made to raise the local sales tax or some other tax. Although public views on the wheel tax may never change, I don’t think it is ever wasted time to try to correct mistaken beliefs that the public holds about something when there is a clear factual record to show that the beliefs are in error.

I guess the two largest mistaken beliefs about the wheel tax are that it was presented by county officials as a temporary tax and that all of the revenue was supposed to go to schools but did not.

In all the County Commission meetings I attended about the wheel tax, there was never any discussion that the tax would be temporary. And there is no wording in any public documents that the tax would be temporary.

Let’s go back to Oct. 26, 1987, the day the County Commission adopted the wheel tax. Here is the story I wrote about the meeting that appeared in the newspaper the next day:



The Commercial Appeal Oct. 27, 1987

Vote gives wheel tax final push

By Jimmie Covington, Staff Reporter

County Commission members yesterday unanimously gave final approval to a countywide wheel tax to go into effect Jan. 1.

Unless opponents are successful in a referendum effort, the new tax–$25 on private automobiles, $10 on motorcycles and $40 on commercial or business-owned vehicles—will be collected when state auto licenses are renewed starting next year.

A small but angry group of citizens spoke against the tax at yesterday’s meeting, with several speakers vowing that enough signatures would be obtained for a referendum.

Petitions with about 19,600 signatures of registered voters—10 percent of the number of voters in the last governor’s election—must be filed within 30 days to put the issue on the ballot.

However, Commissioner Jim Rout reiterated an earlier position taken by county Mayor Bill Morris that a referendum would not be on whether there will be a tax increase but only on the type of tax increase.

Rout said he has no problem with the petitions or a referendum. But he told wheel tax opponents in the audience, “All the petitions and all the referendums won’t change the fact that we have got to be responsible.

“Petitions or not, if it carries 99 to 1, we have got to either raise taxes by virtue of a property tax or a wheel tax. When the vote is taken, I am going to be for one of those because I have to. I can’t afford to be irresponsible about these needs.”

The wheel tax would be used to fund $200 million in bond issues over the next five years, including at least $114 million for city and county school construction, $35 million for housing initiatives, $30 million for new facilities at the Regional Medical Center at Memphis and $21 million for county road projects. Revenue from the tax also would be used to pay part of the county’s current debt.

Morris said a 40- to 45-cent increase in the county’s $3.78 property tax rate would be needed if the new bonds and two $5 million “glitches” in current debt payments were funded entirely through the property tax.

Mayors of the six municipalities in the county outside Memphis attended yesterday’s commission meeting in united support for the wheel tax as opposed to a property tax increase.

Germantown Mayor Warner Hodges III, the spokesman, said, “We have a need for educational facilities both in our county and our city. It will not only aid our county system but will aid our city (Memphis) system.

“The facilities are needed. We only have, as Commissioner (Jesse) Turner pointed out, two methods of raising the money. This is the most palatable alternative and with the vast bulk of the money going for our children, the six suburban mayors support the wheel tax.”

Commissioner Vasco Smith recounted how many of his childhood classmates had met fates of poverty or early death and said education had saved him from a similar fate. “I for one think it (Morris’ $200 million bond issue proposal) is one of the boldest, imaginative initiatives that has been placed before any governing body in the United States,” Smith said.


To help avoid placing a burden on older persons, Commissioner Carolyn Gates said she plans to present an amendment in the next few weeks to exempt one car from the tax for families of people age 65 and older.

The amendment may be among several that commissioners will seek to adopt before the tax collections begin.

As a result of protests from owners of taxicab firms that the tax would create major problems for them, Turner has suggested that a year’s delay be considered in applying the tax to taxis so that the companies can seek City Council approval of fare increases.

Commissioner Walter Bailey said he may want to remove exemptions for antique vehicles and “Music City buses,” which entertainers use when touring out of town.

Twelve persons spoke against the wheel tax and one person spoke for it.

James Marshall, who said he is retired from International Harvester, questioned whether major spending is needed for school improvements and suggested that the use of penal farm inmates be considered in making school repairs.
“I am very much opposed to the $25 wheel tax since we didn’t need a wheel tax when you voted yourselves a $10,000 raise,” he told commissioners. “We didn’t need a wheel tax when you voted Mayor Morris a 47 percent raise. We didn’t need a wheel tax when you voted to give the Lorraine Motel $2.2 million.

I can’t believe that you would put another tax on people that are not even able to buy license plates today.”

Lorene Jones, president of South Memphis Citizens United for Action, said she does not oppose schools but fairer taxation should be sought, including a tax on persons from outside the county who drive here to work. She said she has hundreds of signatures against the wheel tax.

David Lee spoke against the wheel tax but said he wanted commissioners to vote for it.

“My personal feeling is that you may have reached the point where the camel’s back is broken with this wheel tax,” he said. “The reason why I want you to vote for it is because I feel like it is time for the taxpayers to express their will at the ballot box.”

If the wheel tax were rejected in a referendum and commissioners moved ahead with a property tax increase, Lee said voters should put a California Proposition 13-type requirement into effect that would limit tax increases and bond issues.

Marie Anderson, who spoke for the tax, said it would help meet community needs and would be an “investment in the future.”

Citizens who opposed the wheel tax did not get enough signatures on petitions to require a referendum on the tax.

On Oct. 12, 1987, before county commissioners gave final approval to the wheel tax on Oct. 26, the commission adopted a resolution that the revenue from the tax would be used to help pay off the county’s bonded indebtedness.

Specifically the resolution says that “the income produced from the levy of a countywide motor vehicle tax shall be used exclusively to retire Shelby County Government’s bonded indebtedness inclusive of the two hundred million dollar issue authorized in October of 1987.”

Since the wheel tax is general revenue which can be used for any governmental purpose, the resolution was only binding until a commission majority voted to change it.

For many years, all of the wheel tax revenue went to the annual debt service payments. A later commission voted on Aug. 27, 2001, to double the tax and allocated the increased revenue for the schools’ operating budgets.

Since the $114 million plus for school bonds were issued in the late 1980s and early 1990s, several hundred million dollars in additional bonds have been issued for school construction and renovation.


Shelby County budget figures in recent years indicate that about half of wheel tax revenue has been going to school operations and the other half to debt service payments.

This year’s budget includes an estimated total wheel tax revenue of $31.8 million with $16 million allocated to school operations.

In seeking to limit funding increases for schools, commissioners through the years have moved revenues around. Online county budget figures show that school operations received no wheel tax funds in the 2010 fiscal year and only $2.2 million in the 2011 fiscal year.

It would take a year-by-year review of county financial records to be absolutely sure that all of the wheel tax revenue has been used to help pay county debt service costs or for school operations. However, there is nothing on the surface to indicate that the money has not gone for these purposes. And financially, it is clear that the wheel tax revenue has never been enough to cover all of the principal and interest costs on the bonds that were issued in the years right after the tax was adopted and on the hundreds of millions of dollars in school bonds that were issued in subsequent years.


Despite the broad-based public misunderstanding about the wheel tax, it is not clear that Memphis and Shelby County governments have ever adopted any kind of “temporary” tax over the past 50 years.

In 1990, county commissioners approved a referendum for a three-year countywide half-cent sales tax increase to provide additional funding for schools but voters rejected that increase just as they have other proposed county and Memphis sales tax increases in recent years.

At one point in recent years, Memphis City Council members talked about a one-year-only city property tax increase for city schools but that increase was not adopted.

It’s unclear, but the 1990 three-year sales tax proposal for schools may have been a factor in some public officials today and a large part of the public mistakenly believing that the wheel tax was proposed as a temporary tax.

People who want to review the County Commission minutes of the October 1987 meetings when the wheel tax was adopted and the signed resolutions that are included in the minutes may do so by visiting the Shelby County Archives at 980A Nixon Drive near the Shelby County Correction Center. The archives are maintained by Shelby County Register Tom Leatherwood.

Audio recordings of the commission meetings where the wheel tax was discussed probably still exist somewhere. Anyone who wants to go into wheel tax research to this depth would probably find that the County Attorney’s Office would be a good place to start.