Thursday, March 01, 2007

Addressing The Real Problem For Memphians Is A Taxing Challenge

It is inevitable.

It comes in every meeting talking about the future of Memphis or in every committee discussing solutions to current problems. It’s the “consolidation moment,” the time when someone holds up the merger of city and county governments as the answer to all that ails our city.

Few issues are discussed as much. Few topics are as much fiction as fact.

A few years ago, a local corporate leader, speaking to Leadership Memphis, singled out the lack of consolidated city/county government as the primary reason Memphis isn’t keeping pace with cities like Nashville, Indianapolis, Dallas, Houston, Charlotte, and Atlanta.

Misperceptions

Actually, only two of the six cities he mentioned even had consolidated governments, but so pervasive is the myth of consolidation that no one in the audience corrected him, because every one assumed that every city has it but ours.

The truth is that most cities operate – and compete - with a government structure precisely the same as ours. There are 3,066 counties in the U.S., and only 35 have consolidated governments. In fact, of the 100 largest cities in the U.S., only nine have merged governments in the past century.

In Tennessee, there have been 20 referenda to consolidate governments since 1958. Only three passed, and only one of these was in a major urban center – Nashville/Davidson County. Campaigns for consolidated government failed twice in Memphis, four times in Knoxville, and twice in Chattanooga. (Interestingly, school consolidation – the third rail of suburban politics here – took place in every metro area but Shelby County.)

Simplicity In Shelby

With rejections outnumbering approvals by about three to one across the U.S., it’s surprising that such weight is given to consolidation as the panacea to our problems. Part of the answer springs from its simple logic: it eliminates expensive duplication, it increases efficiency, it creates a unified vision of the future, it aligns resources behind that vision, and it improves accountability by clearly assigning responsibility.

Those in favor of consolidation often complain that our local government structure is hopelessly complex. However, there are only eight governments in Shelby County. St. Louis County has more cities than that bordering just its airport, there are 130 different governments in Allegheny County (Pittsburgh), and in Louisville, even after consolidation, there are more than 90 units of government. In fact, a recent study of 35 major U.S. metros with the most units of government ranked Memphis 32nd, which should suggest a rich potential for cooperative governmental arrangements in lieu of merger.

Often consolidation itself becomes a formidable barrier to that kind of cooperation. Its leading proponent is Memphis Mayor Willie W. Herenton, whose calls for consolidation are as dependable as the lack of follow through. His support enflames armies of suburbanites against it, and that’s problematic, because if consolidation is to occur, voters inside Memphis must approve it in a tally of only their votes, and the same goes for voters outside of Memphis.

Suburban Cowboys

Ironically, it’s conceivable that suburban antipathy toward Herenton could be used to produce something unimaginable in the past – support for consolidation. That’s because voters there could come to see a vote for consolidation as the political equivalent of shooting Herenton’s horse out from underneath him by eliminating his city mayor’s office.

That said, its chances are still slim, and because of it, consolidation is often a distraction from pressing problems that can be addressed whether it takes place or not - like the disparity in the tax burden between the citizens of Memphis and those in the other six cities of Shelby County. Now, Memphians pay a disincentive to live inside the city limits, and it makes little sense that they pay more to provide services that benefit the entire county.

That’s why a more pertinent question facing Memphis isn’t how to onsolidate government, but how to equalize the tax burden in Shelby County? Former Memphis CAO Rick Masson, who possessed a clear-eyed understanding of his city’s challenges and a passion for attacking them, made a stab at it in the late 1990’s, but ran headlong into a largely uncaring county administration.

The Right Focus

Masson’s idea was to shift public services that are regionwide – such as parks, museums, education, libraries, education, arenas, and public transit – to the regionwide tax base of Shelby County. In this way, Memphis’ combined tax rate could move down from its current combined rate of $7.47 to something more in line with Germantown’s $5.63.

These days, there’s a more sympathetic partner in Shelby County Government - Shelby County Mayor AC Wharton. His administration possesses an enlightened self-interest about the importance of a strong Memphis to its own financial health. Better yet, it possesses a clearer understanding of its role as the regional government, and that’s a good place to begin a journey toward a tax structure that makes more sense, with or without consolidation.