Shelby County Mayor A C Wharton has begun once again to lay the groundwork for another legislative session in which he will seek the authority to broaden county government’s tax options, but in truth, even if he gets approval for his local development taxes, it’s still a small bandage on a hemorrhage.
In fact, the adequate facilities taxes or impact fees that he is seeking do nothing to address the structural tax problems that are mirrored on the county’s balance sheet. While Mayor Wharton is rightly focused on getting the county budgetary house in order, pursuing these taxes is like putting a pretty façade on a house whose internal structure is caving in. It may look good for awhile, but in the end, it’s still going to collapse.
In truth, the adequate facilities taxes and impact fees would have been helpful for county government…about a decade ago. But now, the taxes don’t generate enough revenue – estimated at around $10 million or so a year – to really solve any problems of Shelby County Government. There’s only one way to do that, and it’s the total overhaul of the tax structure.
As we reported on our blog last week, in a recent study of the largest city in each of the 50 states plus Washington D. C., Memphis was found to have one of the most regressive tax structures of any city our size. The proof was in one simple fact – the more you earn in Memphis, the smaller percentage that you pay in taxes.
Adequate facilities taxes and impact fees do nothing to cure this structural problem, which stems from our local overreliance on sales taxes and property taxes as the primary sources of revenues. The only real solution that would correct the regressivity of our tax structure is passage of a state income tax or a local payroll tax.
If county government is to put its energies and resources behind an aggressive lobbying campaign for new taxes that are a long-shot on their best days, why not put the energy behind something that offers real tax relief for Shelby County?
That said, it is the height of governmental irrationality that our county elected officials must travel to Nashville to ask approval of state legislators for the way that we choose to tax ourselves. It’s enough to make you wonder why we cared so much about home rule back in the early 1980’s.
It was back then that Shelby County worked hard to successfully convince the Tennessee General Assembly to pass home rule for our county government. It was said that home rule would break our county’s dependency on the state legislature for its blessings on Shelby County’s major decisions.
The basic concept of home rule is simple: the authority to act in local matters is transferred from a state law to a local ordinance. Home rule was supposed to shift much of the responsibility and authority for local government from the state legislature to the county board of commissioners. Somehow, the reality of home rule has failed miserably to live up to the promise of home rule.
Yet, here we are, 20 years later, still watching the spectacle of our county executive, hat in hand, begging for the authority to operate his government in accordance with the mandate given to him by his own local voters. In other words, a gaggle of legislators from rural East Tennessee can keep Shelby County Government from having the ability to run its own operations.
But first and foremost, county officials have to convince their own legislators to give them the authority to broaden their taxes. The bill can’t get to the floor of the Legislature for a vote until it has almost unanimous Shelby County legislative support. That’s proven the hardest hurdle of all in recent years, either because of inter-Democratic Party rivalries or because of the no-tax-pledge Republicans who fear for their name to even be associated indirectly with new taxing authority for local government.
It’s a bizarre reality of the intergovernmental relationship that even our own local legislators refuse to give our county elected officials the tools to do their job. Oliver Wendell Holmes may have said that “taxes are the price that we pay for civilized society,” but these days, the covetousness for reelection far outweighs any responsibility to serve the interests of local communities strapped for the revenues needed for their services.
Perhaps, it would make more sense if Mayor Wharton worked to build a coalition of county governments across Tennessee which marched on Nashville to demand “real” home rule. That way, no legislature would have to vote on new taxing authority. Rather, they would be asked to vote to allow the 95 counties of Tennessee to control their own destinies and eliminate their frequent treks to Nashville for approval of everything from new revenues to increasing the members of some county boards.
Getting serious home rule authority passed might even be simpler than lobbying for passage of impact fees and adequate facilities taxes. And it’s time better spent, because besides being band-aids on budgetary hemorrhages, these taxes once again hit property taxpayers, who already bear the brunt of the local tax burden.
If there is a way to pass a local privilege tax for the right to be employed in Shelby County, the tax potential can finally be tapped of the 61,398 people who drive into Shelby County to work and cross the county line to go home each night. Memphis is ranked 13th among major cities in the number of commuters that come into its borders to work each day.
But back to adequate facilities taxes and impact fees, it’s worth noting that there are 14 counties and 85 cities that have been authorized to enact these taxes. Even Bartlett and Collierville have impact fees (they may not call them that but that’s what they are), not to mention Piperton and Fayette County.
It’s a damning indictment of our own legislators’ timidity that they can’t even get done what their colleagues did for Williamson County, Maury County, Marshall County, Robertson County, Rutherford County, Cheatham County, Sumner County, Dickson County, Hickman County, Trousdale County, Fayette County, Macon County, Montgomery County and Macon County. Those counties’ legislators did their jobs, and those counties were given the right to decide if they wanted development fees.
So, how about a vote on “real” home rule authority instead?
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4 comments:
"If there is a way to pass a local privilege tax for the right to be employed in Shelby County...." Do you really think this way? A right to be employed? Not a Roosevelt-ian right to *have* a job, but an authoritarian right to *be allowed* one?
"If you don't like it here, just move soemwhere else!" you might as well say.
Oh wait....
Mike, that's disingenuous, and you know it. They live in the suburbs to avoid paying the social costs of living in a metropolitan area, and they should not be allowed to escape these costs.
If it weren't for the infrastructure that Memphis provides, these people wouldn't HAVE a job, at least not in this area, and they should not expect us to subsidize their lifestyles in the suburbs.
Those of us at Smart City Memphis have no objection to limiting sales tax increases, and if you look at most states with income taxes, sales taxes are considerably lower than ours and do not climb back to previous levels. In fact, it's not the "tax and spend" liberals that scare us, but the present conservative penchant for "tax and charge it." It's hard to trust these self-proclaimed connservatives to protect tax payers, and that seems to be the case in Shelby County since the $2 billion debt was the legacy of eight years of a Republican county mayor.
MSG,
I agree that a cap on sales taxes, and a LOW cap, is critical to ANY income tax plan, and I would support it wholeheartedly.
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