City of Memphis government is public safety and house value poor.
For example, the total amount of expenditures in the city budget for police and fire totals $506 million.
Meanwhile, all of the city’s local sales taxes and property taxes – its two major sources of revenues – only totals $426.5 million. It leaves a gap of roughly $79 million even after every penny of sales and property taxes is applied to it.
Public Safety Budgets:
$206.5 million – Memphis Fire Department
$299.5 million – Memphis Police Department
$270.5 million – local property tax
$156.0 million – local sales taxes
To fill the gap that is needed to fully fund the two public safety divisions, City of Memphis must raid other revenues such as fees, licenses, and other taxes.
It creates a ripple effect that has impacts on other direct services such as parks, community centers, libraries, senior centers, tennis courts, and golf courses, which remain underfunded.
$24.8 million – libraries
$47.7 million – parks, community centers, etc.
The City of Memphis property rate is the lowest it has been in 32 years. It is now $2.70 and 20 years ago, it was $3.43. The current tax rate is the lowest since $2.15 in 1991.
In other words, the property rate could be increased 10 cents to create about $15 million a year for libraries, neighborhood interventions, or broadband. Even with that increase, the tax rate would still be 63 cents lower than it was 20 years ago.
It’s Simply Math
Tax notices later this year are destined to spark the yearly complaints about property taxes here compared to Nashville. There are the refrains about better government there and how the capital city is run smarter.
But, the truth is that the lower tax rate in Nashville is not about management. It is about math.
The median value of owner-occupied housing in Nashville is 256% higher than Memphis which produces the kind of revenues that can afford an NFL stadium, major parks, a new riverfront park and amphitheater, and more.
The Nashville/Davidson County tax rate is $3.254 for the urban services district and the combined city and county tax rate here is $6.09.
But because of the higher home values, the property taxes in Nashville produce about $700 million a year more in revenues than city-county property taxes produce here.
Meanwhile, here, about $75 million a year in city and county taxes are waived for large companies and influential real estate developers.