Sunday, April 30, 2006

Spirit of '76

Memphis Magazine, in its 30th anniversary issue in April, began a new monthly column, City Journal. Here's the inaugural installment by our colleague Tom Jones:

City Journal

It was 1976, and the decline of Memphis had ended. Unfortunately, it was because we had hit bottom.

The economy languished; the Chamber of Commerce flirted with bankruptcy and its last campaign, Believe in Memphis, had fallen flat; Beale Street was boarded up; downtown was on life support; Stax Records was shut down; and the closed Peabody Hotel was a potent reminder of Memphis’ flagging confidence in itself.

And yet, there’s nothing like a crisis to inspire new thinking.

As a result, young Turks conceived a new festival called Memphis in May. Other Memphians laid the groundwork for what became the Center City Commission. A small group began to talk about creating a new generation of leaders, giving birth to Leadership Memphis. City Hall fleshed out plans to buy and revive Beale Street. A new, improved Shelby County Government launched, complete with its own mayor. A fledgling company called Federal Express picked up momentum after erecting its first drop box. Some civic-minded Memphians published the inaugural issue of City of Memphis.

Back then, Memphis was all about survival, and that’s why the most important milestone wasn’t a new program, project, or political office. Rather, it was an obsessive determination - equal parts faith and desperation - to fight for Memphis’ future.

It was a sense of urgency that is all too rare in the life of Memphis. Today, there’s less of a feeling that we are facing history-altering choices, but it remains no less true.

Here’s a half dozen issues we could begin to address today in the name of Memphians 30 years from now:

Reinvent the local tax structure. In a survey of 51 cities – Washington, D.C., and the largest city in each state – Memphis has the third most regressive tax structure in the nation. That’s why the ultimate answer to current government budget catastrophes lies in an overhauled tax structure (such as requiring the 88,000 non-residents who work in Shelby County to contribute to the public services they benefit from), not in patching up revenue shortfalls with new taxes that perpetuate the existing reality of families earning $25,000 a year paying a higher percentage of their income in taxes than families earning $150,000.

Stake the future on quality, not cheapness. To compete in the global economy, Memphis can’t sell itself at a discount – cheap workers, cheap land, and cheap costs. The city-county tax freezes program, which is waiving more than $50 million in taxes, is more entitlement than incentive, given even to companies paying food stamp wages. In the global economy, strategies to “out cheap” Bangladesh or India are a race to the bottom. Memphis’ competitive advantage has to be quality – research universities, highly-skilled workforce, efficient government, and attention to design.

Develop a greenprint. More and more, the future is shaped by a heightened environmental consciousness, and knowledge economy workers are drawn to cities with a “green” ethos. Few cities could compete with Memphis if it created a seamless system linking Wolf River Greenway, Shelby Farms Park, Memphis Greenline, and a reinvigorated downtown riverfront.

Develop an anti-sprawl plan. If words were money, rhetoric about sprawl could pay off the county debt. With the opening of Highway 385 – a worthy test case for the state transportation department’s toll road concept – sprawl is poised to get a $450 million boost. It’s not too late to do something about sprawl, but it’s perilously close. Doing nothing will bankrupt county government, create a disposable community, and hollow out urban neighborhoods and first ring suburbs.

Rationalize local government. Local governments’ current division of labor is schizophrenic, because there is no sense of what is always a city service and what is always a regional, or county, service. This confusion prevents accountability and results in Memphis taxpayers paying a disincentive to live inside the city limits. Countywide services should be shifted to the countywide tax base, more equalizing the tax rates of Memphians with their neighbors in Bartlett, Germantown, and Collierville, and allowing Memphis to compete on a level playing field.

Think and act like a region. Regions are the competitive units of the global economy, and although Memphis is now competing against regions in India and Europe, we’re still focused on competing with Northern Mississippi. This balkanizes a regional economy that is larger than nine states and dozens of Third World nations. New alliances aimed at a cooperative vision of the future begin with interests every one in the region has in common – water and air protection, an integrated communications and transportation grid, smart growth, and economic growth.

Admittedly, this is easier said than done. But if 1976 teaches us anything, it is that it can indeed be done, and maybe this time, it won’t take a crisis to make it happen.


LeftWingCracker said...
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BraveCordovaDem said...

I essentially agree with everything here. I have two comments.

On the tax structure, the obvious short term answer is a Payroll tax. Like all other tax initiatives in recent memory, it seems that those in charge of promoting it might fail a freshman Marketing course. I would hope that the next effort will present a good case to the electorate.

As far as Anti Sprawl, the voters again will have a major say in that tomorrow with the County Commission primaries and that unweildy body of political activists, the Shelby County Democratic Executive Committee, might choose as many as two of those members, depending on if the ineligible Bailey and Kirk win a plurality of votes. The CA reported yesterday that Bailey's son who is strongly supported by the development interests is wanting the seat and the article implied that he was the leading candidate. I would hope that the members, many of whom are highly idealistic, would look at the future of the County and not just who is connected to or related to whom.

Smart City Consulting said...

Bravecordovadem: We've written often about the payroll tax and agree with you completely. As long as we're tweaking the current system, which is structurally unsound, we're only stalling the inevitable. We also agree about tomorrow's voting, but we certainly are lowering our expectations for real change on sprawl. SCM

Anonymous said...

You say:

In a survey of 51 cities – Washington, D.C., and the largest city in each state – Memphis has the third most regressive tax structure in the nation.

I seem to recall this survey, but can't locate it right now. If the survey you mention is the same survey I remember, your characterization is an interesting one. The survey I saw listed Memphis as the third-lowest average taxes among the cities surveyed. As someone living in Memphis, I didn't really see this as something that needed to be changed. I also don't remember the study dealing with whether the taxes were regressive, but rather just listing the average tax rate for the average person making $100,000 in each city. But, sadly, I can't find it again right now.

Anonymous said...

I found the survey I was looking for, and it may be a different survey, as Memphis is listed higher than I remembered.

Sorry for the bad memory.

Smart City Consulting said...

Here's the link to the study of 51 cities' tax burdens:

Smart City Consulting said...

Anonymous: Sorry the entire URL didn't get included: Here it is again.

Anonymous said...

Thanks for the link.

Anonymous said...

A great piece. Sorry Bill Matthews and his Memphis Development Foundation didn't get a mention - without them the Orpheum would now be the Jehovah's Wintesses' Kingdom Hall and the one torch that kept downtown alight at night during the late '70s would never have been lighted. The MDF development of Beale Street Landing also shamed the city into doing something about Beale Street.

Smart City Consulting said...

Anonymous: Thanks for setting the record straight and correcting the oversight. SCM

sherman said...

As long as you're throwing out roses, be sure to give Bill Matthews credit for destroying Stax Records and selling it for pennies on the hundreds of dollars. In addition to ruining the greatest asset to ever come out of Memphis (pre-FedEx), this dismantling was perhaps the worst business deal of all time--selling what is currently worth (30 years later), arguably, 500 million dollars for about 1.5 million. Nice work, Bill. How is that a investment for Union Planters shareholders and Memphians?

Anonymous said...

Here comes that calumny again. In fact, Matthews made superhuman efforts to turn the corrupt, ragged remains of a once great studio into an engine to pump cash into the African American community. In a little reported confab Matthews assembled in Chicago, attended by Andrew Young, the Johnson family, Jesse Jackson and many other leaders, Matthews offered to turn over publishing rights and what was left of any value to a to-be-formed foundation for the benefit of the African American community. The offer was refused, Clive Davis entered the scene and delivered the death blows. In saying no, Mr. Jackson threatened to burn every UP branch in Memphis. Please remember, too, that Matthews refused to join the Memphis Country Club, joined the local NAACP, and pumped huge $$ into the Memphis branch - not as an act of contrition, but because it was the right thing to do. All this while holding off the 2nd largest bank failure since the Depression. Matthews didn't kill Stax. Stax committed suicide.

sherman said...

Clive Davis was long gone from Columbia Records when U.P. pulled the plug on Stax. Whatever happened behind closed doors, Matthews made one of the worst business deals of all time.