Like It Or Not, City Council And County Board Of Commissioners Have Seats At The Table In Decisions About Tax Freezes

While we’re on the subject of tax freezes (as we were yesterday), it sure looks like most of the candidates in the races for county commissioners are using the real estate developers’ talking points.

One of the questions put to candidates by the Coalition for a Better Memphis asked about their strategies to improve the county’s economic development, and it was eery how similar some of the answers were to the mantra of the real estate development community fighting any changes in the PILOT program.

For example, take Mike Carpenter, running as a candidate for Board of Commissioners’ District 1, Position 3:

“Next, the County Commission must avoid politicizing PILOTS, while balancing the need for accountability…County Commissioners, nor City Councilmen, should review and approve PILOTS. This should be left to the economic development experts on the Industrial Development Board. The County Commission could play a role in revamping the PILOT formula to give preference to economic development targets such as Biotech and Corporate Headquarters.”

Isn't that the current system, the same one that's waiving about $60 million a year?

Let’s say a couple of things for the record one more time.

One, there is no way to politicize PILOTs. They are political to their core. They exist as part and parcel of a political system. They eat and breathe politics. The notion that there are IDB officials sitting in some pristinely nonpolitical conclave making decisions on tax freezes is humorous in its naivete.

Two, it’s City Council members and County Commissioners who are charged with the power over tax freezes, not the mayors. That’s because Tennessee Law gives the power to the legislative bodies, and they in turn delegated that power to the Industrial Development Board and Center City Revenue Finance Corporation.

Legal Responsibilities

Put simply, the legal responsibility for tax freezes rests with the legislative branch. And yet, there’s this persistent belief – cultivated by well-connected political insiders - that City Council members and County Commissioners are meddling where they have no business.

Besides their legal authority, there’s an even more compelling reason that legislators should have a voice in these decisions. They are the ones charged with balancing the budgets although about $60 million has been taken off the table in the form of tax freezes before they even start.

Since 1987 – when power to grant tax freezes was shifted from the local legislative bodies to the IDB and CCRFC – City Council and Shelby County Commissioners have been directly dealt out of decision-making on tax freezes.

Some philosopher said that the definition of insanity is doing things the same way and expecting different results. It’s becoming clear out on the hustings that taxpayers are not insane and the pressure for sanity within the PILOT program will only build.

It’s a high stakes game that some real estate developers are playing, because eventually, the public will get the action it demands. The greatest risk for developers is that tired of being belittled and ignored, the City Council and County Commissioners take back control of the tax freezes. It can happen on any day that the stars align and the votes come together.

As the Shelby County Attorney’s office said in an opinion a decade ago, if the local legislative bodies giveth, they can also taketh away.

It’s in everyone’s best interest to develop the best solution --a tax freeze system known for its accountability, its transparency and its objectivity, three qualities in short supply in the present system.

As for the Coalition for a Better Memphis, it’s encouraging whenever leaders and organizations – grassroots and prominent – are willing to get their hands dirty by getting directly involved in the political process. Dean Deyo, former head of Time Warner here, deserves a lot of credit for putting together this new program.

We admit that we are perplexed by some of the evaluations and the framework used by the Coalition members to reach the grades announced this week, but those are expected first year growing pains. Regardless, the Coalition’s a welcome voice in the political process if it can improve the quality and qualifications of candidates for public office in this community.