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The Simple Truth

June 21, 2011

As the City of Memphis works to complete a budget, we know there are still questions and misconceptions.

Below, we try to clear up some of the confusion.

NO NEW POSITIONS

There have been several positions that have been repurposed and renamed under the Wharton Administration in line with the Administration’s strategic vision, but no new positions have been added to the already existing compliment of positions in City Government. Keep in mind that adding new positions to a division’s compliment requires City Council approval.

PROPERTY TAXES HAVE NOT BEEN CONSISTENTLY RISING

There is a misconception that taxes have been steadily increasing over the years. The property tax rate is currently ONE CENT more than what it was in 1993. The current tax rate is $3.19; 18 years ago the tax rate was $3.18.

NOT SEEKING PRIVATIZATION OF SANITATION SERVICES

The Wharton Administration is not seeking privatization of sanitation services. The Administration has, however, asked labor leaders with AFSCME Local 1733 to identify efficiencies and strategies that can lead to savings for the division.

 MEMPHIS TAXES IN COMPARISON TO OTHER CITIES

While Memphis – the largest city in Tennessee – may have some of the highest property taxes statewide, this storyline of high taxes ends at the state line. This has much to do with the fact that Tennessee is ranked as 47 out of 50 states relative to the tax burden placed upon its citizens (Source: The Tax Foundation). This point actually makes Memphis one of the nation’s more tax-friendly cities (Source: Kiplinger Finance).

18 CENTS WOULD BE A RESTORATION OF THE PROPERTY TAX RATE

With the former City Administration prepared to request a substantial property tax increase, the Memphis City Council voted to reduce funding to Memphis City Schools for FY 2008-2009. This was in an effort to address the double-taxation issue that requires city residents to be taxed by both the county and the city in funding schools. The money saved from the cut to school funding was used to fund other “economic drivers,” essentially negating the need for a tax increase. Additionally, the Council opted to pass along a 18 cents property tax cut out of savings gained from cutting school funding. Since this time, the courts have ruled against the City of Memphis and determined that the funding cut for 2008-2009 is due back to MCS. This includes the amount given to Memphis citizens in the form of the 18 cents tax break. Raising the property tax rate by 18 cents would restore the property tax rate to its 2008 level.

 PERSONNEL COSTS ARE 70 PERCENT OF THE CITY’S BUDGET

Personnel costs account for some 70 percent of the overall city budget. Without substantial increases in revenue, it makes it very difficult to make deep cuts while avoiding some impact to personnel or the costs associated with them. Some 75% of public workers are employed in the three largest divisions in city government – Police, Fire, and Public Works.

PUBLIC SAFETY ACCOUNTS FOR SOME 60 PERCENT OF THE CITY’S BUDGET

Fire and Police Services together account for some 60 percent of the overall city budget. Consider this example: In July 2006, there were 1989 commissioned police officers. Today there are 2381 commissioned officers – a nearly 20% increase in the force at a cost of approximately $21.4 million. Over this same period of time, the property tax rate – the primary funder of city government – decreased from $3.43 to $3.19 cents.

EARLIER CUTS

Approximately $23 million in budget cuts and reductions have been made in the last year and a half. These cuts did not impact fire or police.

FIRE SAFETY IN MEMPHIS
In comparison to other fire departments of major U. S. cities, the Memphis Fire Department is well equipped in its ability to respond to emergencies. Memphis has more fire stations, fire engines, and fire trucks than each of the following cities:

• Dallas although this city has twice our population and is similar to us in square miles;

 • Jacksonville, Florida although this city has 200,000 more citizens than us and 400 more square miles;

• San Antonio, Texas although this city has twice our population and more square miles;

• Indianapolis, Indiana although this city has nearly 200,000 more citizens and more square miles.

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