Earlier this month, Kevin Kane of the Memphis CVB told the City Council that the Cook was functionally obsolete, something I could have told you before the $100m renovations, approved in 2001.
Realistically, that would have been the time to build, but the political will just wasn’t there.
Days after Kane’s statement, Otis Sanford said a convention center just isn’t in the cards.
I think it should be part of the discussion of downtown development.
I think it HAS to be.
I also think that any discussion has to have an element of a larger conversation that transparently assesses our current assets, liabilities, and doesn’t seek to solely “keep up with the Nashvillians”.
I spent way more than a decade in the Convention business. I’ve done my fair share of events, large (25,000) and small (<250) in just about every convention center and arena in the US. I've been out of the business for more than a year now, but things haven't really changed that much. Planners are still looking for three basic things: a place they can sell to their attendees (read something they can't get at home), convenient accommodations (lodging, travel), and space that isn't overly restrictive.
Newness doesn't necessarily play into most decisions...it can attract people, and scare them off depending on their tolerance for the unknown. Lots of hotel options and convenient parking are more important for conventions bringing lots of folks in from out of town town than "newness". Most conventioneers don't give a crap about the space...unless it's really bad. They care about the place.
Our current space is constraining. One event I still get calls to do can't come back to Memphis even though they want to because the space is too small, and more importantly, there aren't enough hotel rooms downtown. Between 3,000 and 6,000 room nights are lost because of the size of our convention center on that one show alone.
Add COGIC to the mix, and that's a lot of money being left on the table.
We can't make a decision based on two shows, but those two shows can give us an idea of what we're missing.
As I said in this 2008 post, any plan that doesn’t start with the FedEx Forum at the center of it is missing the boat. We’ve got an awesome arena that could be used a lot more if we planned our conventions around it.
One convention I did for several years used both arena and convention center space. In Houston, we occupied the Toyota Center for two weeks, and a huge chunk of the nearby George R. Brown Convention Center for about 10 days. 15,000 attendees, over 150 crew members, hundreds of thousands of dollars in catering, convention services, and local labor. It was a lot of money.
That show moved every year, using the Georgia Dome in Atlanta and the Edward James Dome in St. Louis…as well as their accompanying convention centers.
Now we may not be ready for something on that scale just yet, but we’d be fools not to plan to be. The truth is, we need a ton more hotel rooms downtown, but there’s not much incentive to build under the current situation, and there’s just about no place near the Cook to put a new large hotel (unless its serving Bass Pro) on that end of downtown.
This will be the critical “chicken/egg” argument that gets brought up. But last I checked there were two new hotels slated to start building downtown. I’m not sure how many rooms that will add up to, but with a 60% occupancy rate, there’s a better than average chance that we could add more capacity downtown in the near future.
Breaking ground on a newer, bigger convention center would increase those chances…so long as it was done in a way that allowed for that growth very near by. That’s key.
By the way…if we ever want to host an NBA All-Star game, more hotel rooms is probably the first priority. We have one of the nicest arenas in the country. Our arena isn’t the reason the NBA hasn’t come here yet. Its hotels, pure and simple.
Beale St. is a huge asset, though until recently, folks may not have thought of it that way. But we can’t get so caught up in Beale as the central driver of evening tourist fare that we don’t think about the area in a bigger way.
There’s a lot of undeveloped or underused land in the downtown area (west of Danny Thomas, north of Crump, south of A. W. Willis).
I’d have to go back and check, but I think much of that space is thought of currently as potential residential space. Residential isn’t going to bring us more hotel rooms. We need to connect our assets in a way that makes people want to come to Memphis, or hold their convention here.
Reconsidering plans that may have been in the works for years has to be part of this. And having plans for expanding the core “tourism” area downtown also has to come into play…even if those plans don’t come to fruition for a decade.
We’ve got a lot of assets, even if not all of them are downtown. The Civil Rights Museum (a USAToday “iconic attraction), all the music…from the blues, to Sun, Stax, and even Elvis (Graceland was the other USAToday “iconic attraction” from Memphis). While these things may not be right next to each other, they are attractions that are meaningful to people outside of Memphis…even if those folks don’t know it. They are connected in ways that may not be evident to folks here. In fact, their stories are more intertwined than you might imagine.
We’ve got to tell those stories, and the story of how they’re intertwined better…but we’ve also got to connect these dots for people so they have more of a reason to come here.
That’s what marketing is.
Right now we seem to rest primarily on Elvis, and to a lesser degree, Sun and Beale. The Civil Rights Museum is too often an afterthought…which is unfortunate, because the story it tells is a huge connector to the music from these different places.
Clayborn Temple needs to be a part of that as well. It’s a shame that this historic building has been allowed to decay the way it has.
But back to this proposed committee. If it comes to fruition, we need to be real honest with ourselves and the people about where we stand right now. That means how much we’re doing at the Cook now. How many room nights that is, and how many rooms there REALLY are downtown (they say more than 4,000…but what does “downtown” mean to the CVB?).
We don’t necessarily need to think about trying to directly compete with Nashville. They’ve got more convention space than they can deal with between the new Music City Center and Opryland. We need to be realistic…which means neither undervaluing, nor overvaluing what we have to offer here.
We also need to carefully evaluate how we’re selling Memphis. Other cities our size have scads of sales people flung clear across the country. We have to look at the current sales plan for Memphis, and evaluate it against other cities (bigger and smaller) to find the right fit for us.
We need to consider that the Cook is still viable for some events, even if it’s not the best spot for all of them (I’ve done scads of events in the Ballroom and Cannon Center and they are valuable additions to Memphis).
Most of all, we have to be honest with the people about what the committee finds.
I support the idea of exploring a convention center because I know first hand what it can do for a city if its done right. But I’m also leery of the way another big project that gets handled.
We don’t need another Beale St. landing. Hell, we didn’t need the first one.
We don’t need another shadowy semi-autonomous board (RDC) that acts as if the public doesn’t exist and doesn’t take care of city assets (like Mud Island).
If anything, we need to have fewer of these kinds of boards.
Most of all, we don’t need another boondoggle…and this could turn into one real quick. Which is all the more reason to make the proposed committee the model for transparency…unlike the aforementioned shadowy semi-autonomous board that also has its hands in the downtown area.
Anything less is a recipe for failure…and that’s something we certainly can’t afford.
Ed. Note:Corrected issue of appointment to fill Reginald Porter’s seat.The morning’s announcement of a decision in the contested election results of School Board Dist. 4 brings up a lot of issues just weeks before the School Board is set to shift from 23 members to 7.
The first issue is the now upcoming election. When will it be and what assurances will be made that the same problems will not mar the upcoming election?
Despite the assurances that the November election would be trouble free, a report from February showed that more than 400 voters in one precinct received the wrong ballot in one precinct that either mistakenly had, or didn’t have the City’s gas tax referendum.
But the upcoming election may not be the biggest fish to fry, or knot to untangle, and the questions could come before Judge Mays to decide.
The first question: Who, if anyone, will occupy the seat after the school board contracts to seven districts on September 1st.
Judge Mays has already determined that one seat could be left vacant until next year…the seat formerly held by Reginald Porter. Updated:The County Commission is set to appoint someone to fill the seat of Reginald Porter on September 9th…assuming it doesn’t get delayed. Will the Judge change course and allow an election on that seat at the same time? If the election is held in conjunction with the City sales tax referendum on Pre-K funding, ganging up those two seats might not be a bad idea, and would save some money for sure.
The second question, and perhaps more thorny, is that of decisions made by the school board since the certification of the August 2012 election. As Leftwingcracker points out, many of the decisions were narrow, by one vote. Will those decisions stand now that the election has been deemed irrevocably damaged or will the Judge call them into question? That’s a knot that could take a long while to deal with.
I would be surprised if Whalum didn’t ask Judge Mays to rule on these issues. Upon hearing the ruling from Chancellor Kenny Armstrong, that was the first thing I thought he would do. That’s what I would have done.
But the biggest question, one that goes well beyond the scope of the School Board, is who in the world can trust this Election Commission to do their job at this point. Between the August 2012 election that gave wrong ballots to thousands of voters and the November 2012 election that did the same to 400 voters in one precinct alone (mentioned above), who in their right mind actually thinks this Election Commission, and more importantly, this Election Administrator can do the job and conduct an election free of these kinds of completely avoidable errors.
There’s no question the Republican Shelby County Election Commissioners won’t have the guts to do what their counterparts in Nashville did just a few months ago. If anything, the local Republican Election Commissioners have doubled down in their support of Richard Holden, who they continue to allow to spread mistruths about the how and why of the problems in the August 2012 election, even after being rebuked by the Secretary of State’s office and a Comptroller’s report.
The next couple of days should be interesting. Between the school and election issues, I can’t help but believe we haven’t heard the end of this issue…and the issues surrounding it.
Noses are funny. Often the most noticed facial feature…next to the eyes, noses are also one of the most complained about things people have on their face.
My nose, is what I affectionately call a “3 finger nose”…meaning, from my face to the tip is three fingers long. You can see it below.
When I was a kid I hated it. I wanted a smaller nose.
It was an object of teasing and torture through my adolescence. I’ve never been so vain as to consider plastic surgery on it, but I certainly “wished it smaller” more than once.
My nose is a feature that provides a great deal of utility from the obvious, smelling, to holding up my glasses. This, of course comes with some costs. Allergies or head colds aren’t a small affair for me. There’s a lot of real estate there. A lot of ground to cover. More than one tree has died in the service of blowing my nose. I’m sure many more will as well.
Eventually, I came to grips with my feelings about my nose, even beating people to the punch with jokes. It is a dominant feature, no doubt, but its one that I have come to embrace over the years.
So what do noses have to do with the Memphis budget? Simply put, by focusing on tax rate, and cutting, cutting, cutting, we’re proposing a solution that not only doesn’t address the bigger problems, but also creates an environment where there’s no oxygen in the room to even discuss them.This is almost like the behavior of a newly single middle aged person trying to find the one thing that will make them attractive once again to the opposite sex.
Its easy to focus in on one thing, and proclaim that by fixing this one thing…everything will somehow be ok. The unfortunate reality is that by focusing in on that one thing, we ignore the real problems…the fact that we can’t see our toes, that we need to eat healthier and exercise, or that we need more therapy than we can afford.
We focus on this one feature, like a nose, because its simple.
We convince ourselves that by correcting this one simple single problem we have shot the silver bullet that will make the others go away. But this never works out. The problems remain, and we are still in the same situation we were before.
Our only choice is to either focus on addressing the real issues, which is hard, or find another distraction that will be our next failed “silver bullet”. Thus far, this Council and the Administration has focused on the distractions.
I do appreciate the support, but this isn’t just about any one person.
I consider Jim Strickland a personal friend. He supported me in my campaign, and I’ve supported him in his past campaigns. We disagree on this issue.
I started down this road because, aside from my belief that “tax rate” is a poor metric by which to judge efficiency, I am also curious as to what the end game is. What is the long-term vision? How will doing this address the long-standing problems that impact Memphis…from crime and education to economic opportunity and flight…especially for those who are suffering most (low income families) and leaving the fastest (middle income families)?
Thus far, that hasn’t been described in any tangible way. So, absent something to convince me otherwise (which would be a tough sell to begin with), I’m left with little understanding as to the long game.
When I ran for County Commission last year, I talked about solutions that outlive political cycles. “Solution” is a word I don’t really like to use, because it implies permanence or that there is a “silver bullet”. Policy is neither permanent nor a “silver bullet”.
Policy, is supposed to be a living, breathing thing that evolves as the situation evolves. This is hard for politicians to accept. We all want things to be simple. We want answers to be certain…”If A then B” type statements. That may make for a good TV sound byte, but it doesn’t make for good policy.What we get, more often, is gut reactions and hill to die on declarations, especially from legislators. This is only compounded when the administration has failed to either articulate, or gain widespread support for their vision.
And that’s where we’re at, and where we’ve been for some time…even before Mayor Wharton took over. We’ve been a city without a policy vision.
The CVB has a vision of Memphis that it is pushing both internally and externally.
A slew of local non-profits have articulated their vision for either attracting or building up local talent. (more than I want to try to mention)
Hell, even the Grizzlies have articulated a sense of self-identity with their “Believe Memphis” and #Grit #Grind mentality.
Why we can’t adopt any of these ideas, these identities, and turn them into an attitude for a long-term policy vision for the community is beyond me. But here we stand, fragmented. Looking toward our future with little to no idea of what we’re working for when we get there, or how to do it.
So rather than do the hard work, we go for the nose job, or the facelift. We buy some snake-oil salve from a late night tv infomercial, or rehash tried and failed “tax cuts = job creation/growth” strategies we borrowed from an administration that saw the single largest devastation of middle class wealth since the Great Depression.
We get caught up in cosmetics, rather than getting on the treadmill and putting down the Pork Rinds, or maybe reading something other than a trashy pulp novel for personal development.
In short, we focus on the fast food solution for our challenges, and leave feeling just as unsatisfied as we were when we started, and a little bit fatter.
I’m not saying I have all the answers. But come on:
If flight out of the city is something you’re concerned about, laying off and eliminating jobs is one helluva way to say don’t move from Memphis. You just nearly guaranteed 400 people will move. They’ll have to.
If Public Safety is something you think we should focus on, eliminating 280ish public safety positions is one really self-defeating way to do that.
If you think taxes are too high, then how will you explain to the public that these very actions will increase insurance premiums by 11% to 15% (which by the way, is more than the tax hike would be).
I’m just saying, with four members of the City Council supposedly angling to run for Mayor, you’d think there would be something better on the menu than the paper plate of failed ideas and broken dreams we keep getting served.
You’d think that some kind of coherent vision would emerge…something people could get behind. Because what’s going to happen now is people are going to love the tax break and be pissed when their house burns to the ground, or Ma-Maw dies of that stroke because response times increased, or you wake up to find some dude rifling through your car at 3am because the police presence just ain’t there any more.
That tax cut isn’t going to mean anything when that happens. And people will use those experiences to drive their decisions and belongings out of town…just like they have been for more than 20 years (with a lot of help from the County Commission, I might add, which has, in turn, negatively impacted their ability to raise revenue).
For 20 years, as a city (and a County) we’ve bought one facelift and tummy tuck after another, expecting our fortunes to magically change, all while not dealing with the real problems facing the city (and County), and chasing after folks that just don’t and ain’t gonna love us no more.
For 20 years we’ve given lip service to the real issues that are driving down revenues, and stymying population growth, all while cramming Ho-Ho’s and pork rinds in our face and ignoring the real hard work that has to be done to correct the problem.
That’s not just dumb, that’s a slow suicide.Its got to stop. But to stop, we have to have leaders who don’t look at the whole enterprise as a lost cause, and I’m not convinced that’s what we have right now.
And while the facelift we’re currently contemplating (aka the rate cut) may make us look pretty on Facebook and Twitter, there’s still all those real issues lingering beneath the cropped edges on that profile picture that have been, and will continue to drive people out, or keep them away.
In the end, this facelift will be just as successful as all the past ones…un…and we’ll still have all the same problems, but worse.
And a year from now we’ll be sitting here wondering why it didn’t work, and still have no long-term plan, and wonder if that stomach electrocution thing really will give us six-pack abs or if they just hired models that already had them and put it on them.
What’s worse, we’ll probably buy that dumb piece of crap looking for another silver bullet.
We shouldn’t be surprised or disappointed when it doesn’t work.
At the end of my last post I talked about value. Specifically I said:
In the mean time, the Council needs to think long and hard about their ideas of revenue, expenditures, long-term liabilities, rate and most importantly, value.
…phrases used in this and previous budget negotiations are empty political rhetoric unless they include specific proposals backed by accurate data that adds real measurable value to the citizens of Memphis, not conventional wisdom or ideological flights of fancy.
What did I mean by that?
The short answer is, does the proposal fulfill some kind of need in a meaningful way that adds value to the community without causing undue harm?
That probably seems like a long answer, but the truth is, there are many considerations that must be taken into account to determine ‘value’.
For instance: Some feel that outsourcing certain City functions would reduce spending, and thereby create ‘value’. At the top line level, this may be true, a private contractor may cost less to provide a service, and that may seem like value creation.
However, that savings on the top line comes with a cost…usually to employee pay, which means less income for the family, which translates to less spending and ultimately less revenue for the city in a heavily property and sales tax dependent environment.
The “value” is determined by a formula that looks at both savings to spending and reductions in revenue as a result of the proposed plan.
You can’t cut a number of employees and pay the rest less privately without a hit to your revenue collections. The families impacted will have to react to the new conditions. They may have to sell or otherwise lose their home. They probably will have to cut back on spending themselves…which in turn means less revenue and perhaps an empty house. The amount per person may seem negligible, but multiplied by tens or hundreds of employees, it can turn into an awful lot of lost revenue.
Whats more, the reduction may not be just a portion of the revenue collected. Depending on the job, the person may have to move away to find work, meaning that revenue is gone until the economy organically produces a job of equal value…which in a slow economy could take a while.
If that top line savings is then offset by a tax rate reduction, you’ve just cost yourself rather than saved anything other than a few pennies on the dollar dispersed across the economy in a way that will never create a return. This not only doesn’t solve long-term budget issues it most likely leads to more problems in the future.
Short answer: You cannot cut your way to prosperity or health. That’s why we stopped the practice of bloodletting.
There are a bunch of words that are easy for people to say in political rhetoric. “Cut spending” or “cut taxes” are two of the most popular, especially now in the wake of 30+ years of Neoliberal economic policy. This idea basically says that cutting spending, and seeking savings from privatizing public functions creates intrinsic value.
Adherents of this neoliberal economic ideal aren’t restricted to a specific party or ideology. Both sides have used the argument to further political aims, primarily to reduce spending for things they don’t like as a part of their ideology.
The chorus of conventional wisdom has become so loud, the notion that cutting spending/taxes is a good thing is largely unchallenged in the media or by the electorate, even if the ultimate outcome is negative.
The net negative literally slides by most people, completely unnoticed. When it is discovered the problem remains, faith in government and civic institutions erodes. – Wash. Rinse. Repeat.
When looking at the top line math of policy, spending alone has no value. Increasing or decreasing spending alone has no positive or negative value. The ultimate effect of that increase or decrease is where the positive or negative value lies. And that is the part of the conversation conventional wisdom that has become popular mythology ignores.
Neoliberal economic policy assumes it is correct to reduce spending without proving it. Now, some 30+ years after the wholesale adoption of such policies, there’s a great deal of evidence to suggest harm. Since the dawn of wholesale neoliberal economic policy during the Nixon administration, wages have been stagnant or decreased across nearly all sectors. Income inequality has skyrocketed creating more have nots than haves.
I should note, one of the conditions that allowed this economic philosophy to so enthrall the conventional wisdom of the nation is the ease with which it is spoken. Presented as “kitchen table” discussions, when budgetary issues on even a local level bear no resemblance to said discussions does a disservice to us all.
Further, the conditions present at the inception of this economic philosophy…in a time where there were few controls for efficiency, helped expedite the adoption of this philosophy.
Rather than a simple +/- math question, we need to be willing to explore the overarching, and underlying math that determines the value of economic decisions.
No one seems to be really asking those questions or even acknowledging they are valid…which is a very large part of the problem with the long-term outlook of the City of Memphis budget.
Value doesn’t have to cost more. It doesn’t have to cut spending. It just has to have a net benefit to the community.
It has to be as efficient as possible (though some things are inherently inefficient but vital, like education, and plumbing). It has to seek to meet a need. It has to work. It should have sound metrics and math, rather than belief or mythology regurgitation at its core.
The items that one seeks to address cannot be looked at from the simplest levels. The equivalent of an economic MRI is required…to see what’s happening on the inside, to get to the things people immediately see on the outside.
There’s a great deal of data available at your fingertips for people with the knowledge and willingness to use it. Not all of it is specific to Memphis, but we can and should work to use it to inform our decisions and try to get ahead of the challenges we face as a community.
It has to be comprehensive. You can’t look at one piece of the pie to get to the number of cherries in the whole pie. You have to look at all of it, honestly, dynamically, with an eye toward solutions that last longer than political fortunes. With a commitment to presenting those solutions to the public, not overselling them, and seeking a commitment in return.
It is neither politically expedient, nor easy, but that’s how you get true value, true growth, and eventually, community buy in.
If that’s happening, I’m not seeing the effects which means we’re either not talking about it, not talking about it effectively, or we’re just doing it wrong.
We create value both by doing this kind of honest and deep investigation, and finally, by seeking to enrich our community by investing to reduce the impact of our net negatives…knowing we will never fully eradicate them.
Instead, we’ve chosen to be paralyzed by our challenges. We speak of them as existing in perpetuity…as impossible problems to tackle.
When we do that, we place our community in a position where nothing is possible but decline…decline in wages, and property values are the result…decline in spending is heralded as the only solution to jumpstart the economy.
But that’s not the case here, or anywhere else. Just as blind additional spending isn’t the answer.
The answer is to stop focusing on the top lines or the beat up exterior and start seriously looking under the hood. That’s where you find the tools to build value…both in a budget, in an economy, and in a community.
If you’re not confused you’re not paying attention.
To be honest, I’ve been on vacation for a week, and doing everything I can to not pay attention, but the events of yesterday’s Memphis City Council meeting snapped me back into reality.
By my count, I’ve seen five separate budget proposals put before the Council:
• The original plan that increased the rate to $3.39.
• Three plans reported by the CA on May 30th. All three have a variety of options, all dire either through extreme cuts, or tax increases.
• The current plan, which increases the rate to $3.51 reported on June 4th.
I reserve the right to revise and extend this list in case I’ve left one out (I’m a blogger, not a journalist, I can do that).
I haven’t seen the latest four budget proposals, so all I can do is rely on media reports until I can track them down. I also don’t know which one Mayor Wharton is most wed to. I presume its the most recent budget, which seems to resemble the original proposal more closely, but also seems to ignore the results of impasse proceedings that have made their way through the pipeline over the past several weeks.
The long and the short of it is: We’re 25 days out from the new fiscal year, and we seem no closer to a resolution to the budget issue than we were back in the middle of May when I published my last post.
Coincidentally, Nashville just passed their budget. $1.8b for all Metro and County operations. $1.8b is also the sum of all City and County operations, even though our population is nearly 300,000 more people. Maybe if I add in the budgets of the other municipalities it would make more sense, but I kinda doubt it.
There’s been a lot of rhetoric surrounding this budget season. The reasons for this are many: ideology, political aspirations, and personal vendettas are the first three that come to mind. But beyond the rhetoric is the basic reality of 9th grade civics involving government. Simply put:
It is the responsibility of the Executive Branch to propose a budget.
The proposed budget should reflect the priorities of the Executive branch with an eye towards the long-term direction of the community and the realities of the revenue sources, long-term liabilities, and nuts and bolts expenditures of the city. An accurate portrayal of these financial realities is critical, because they ultimately inform the public, and Legislative Branch, of things that are coming down the pike. This is just a proposal, however, not the final product.
It is the responsibility of the legislative branch to enact a budget.
The enacted budget can be similar or radically different from the proposal. Legislative branches have wide latitude to re-shape all kinds of priorities with the budget pen. The tailoring of these priorities can be surgical in nature, or a Frankensteinian hack-job.
But lets not get it switched. It’s not the fault of the Executive that the Legislative branch passes a budget that conveniently ignores any or all of the revenue streams, liabilities, or expenditures. Once the Legislative branch is done either giving a haircut, creating a monster, or anything in-between, it is the job of the Executive to try and make that budget work, and realize as many priorities as possible, with the tools they have available as a result of that budget.
Seems to me that both sides have forgotten portions of this throughout this and previous budget seasons. And while I believe that a skeptical eye is both critical and necessary to being an effective legislator, personal issues seem to have taken over what should be a professional exercise.
The budget season was on track to be a contentious battle in the first place. Lower revenue outlooks due to decreases in property values meant either a tax increase (from 3.11 to 3.36 to remain revenue neutral) or serious cuts were in the future.
The report detailed many problematic financial issues. The one most widely mentioned is the “scoop and toss” debt refinancing the City has engaged in several times in recent years. While there’s no doubt that using one credit card to pay another is a bad idea, if it means a lower interest payment, and there’s a commitment to actually pay down that debt, it can be an effective strategy for reducing the impact of debt on revenue streams.
It should be noted, Shelby Co. government has refinanced a great deal of debt over the past several years using historically low bond interest rates to reduce short-term liabilities. I’m not sure why Memphis’ use of this tactic is any worse, except that the overall revenue outlook probably doesn’t have as much upside.
So debt is a big deal. The other big deal is revenue, which the report notes, is declining necessitating a tax increase, a reduction in spending, or both.
What most people haven’t keyed in on is the section of the report called Fiscal Concerns located on page 4.
In that section the Comptroller says:
“…We are concerned with the low level of general fund balance after accomplishing the corrective actions listed above. The City appears to have funding needs in the near future for liabilities related to pension obligations, other post-employment benefit obligations, and money owed to the school system. Also, the City has aggressively used PILOTs and other property tax incentives for economic development purposes which have cut into future property tax revenue growth.”
You can take that paragraph a couple of ways, but all of them include the following: We’ve got some big bills coming due.
Really, most of this is stuff people already knew.
Pensions aren’t in the budget, as far as I can tell, but its a subject that some of my more conservative friends consistently herald as a bad long-term liability. Its hard for me to tell if this is reality or just some bias against paying pensions, but I sure would like some clarity on the issue. (though this article mentions the liability problems, though not in detail)
There is a section called OPEB (Other Post Employment Benefits). We borrowed $22m from that fund last year to pay for Pensioners Insurance (that’s what it looks like anyway). From my perspective, that money never should have been borrowed. Period.
So now, we not only have to fund the current year, but also last year. I don’t know who proposed that, but it was a bad idea that follows a trend of folks taking a promise and turning it into a threat when it comes to dealing with retirees.
That ain’t cool.
What’s most interesting to me is the comment about the aggressive use of PILOTs and other tax reduction schemes for business. Does this mean these things aren’t paying off? This year the budget mentions $5m in PILOT payments. Last year, AFSCME had a list of the top PILOT recipients. I used to have it somewhere, but I can’t find it. Needless to say, the savings to business was north of $20m…for the top 10 recipients.
This begs the question…are these incentives doing what they’re supposed to? The Pew Center on the States has a paper from last year that deals with state incentives and some of the pitfalls. It might be a good read for local governments too. While the EDGE Board may be super transparent compared to other IDB’s, I haven’t seen them recommend the revocation of a PILOT due to non-compliance. That’s a little concerning since, I’m pretty sure there is at least one isn’t meeting the terms of the agreement.
The Comptroller’s report makes mention of a 5 year strategic plan. I haven’t seen this document. I’ve heard a lot about it, but until someone can point me to a copy its vaporware as far as I’m concerned.
The Administration hasn’t done a good job of selling this plan to the public, and that’s part of why the Council is picking them apart.
The Council has, in the past, sought some kind of longer-term budget guidance. I’m not aware of any vote or resolution that would mandate such a plan. Right now, I’m not sure the politics of the situation would allow some members to give that kind of high ground to an administration that they’re basically actively running against. That’s a missed opportunity in my book.
The Council, by contrast doesn’t have to be as consistent. Legislative bodies, by their nature are supposed to have a somewhat adversarial or at least skeptical eye toward administrations. I’m not sure this level of adversity is productive, but political fortunes and personal vendettas being what they are…this kind of thing isn’t entirely unexpected.
In the absence of an articulated, concrete vision, legislative members are free to roam the hills of fishing expeditions and rhetoric that suits their political needs. I see more of that than an honest appraisal of what needs to happen to make Memphis more sustainable going forward.
The City Council has not seemed to be able to muster any kind of consensus long-term vision. 12 of 13 members are in the second year of their second term. Many of the decisions they have made over that nearly 6 year period have brought us to where we are today. I don’t blame them for the overall national economic conditions, or all the things they inherited, though 6 years in, the timeframe for that pardon is quickly diminishing.
Its time we got serious…and if this is what serious looks like…then wow, just wow.
A couple of months ago I gave a talk on school funding. In that presentation I said:
Budgets are a reflection of the moral convictions of a community.
I hold to that.
I hope our moral convictions are such that we would be very cautious about seeking additional sacrifices from working families that just happen to work for the City. The 4.6% cut last year was a hit in hard economic times. There should at least be a timeframe for restoration of that cut. We can’t be a city that penalizes people who serve our community. That’s no way to grow.
I think everyone understands that some positions will be eliminated while we try to clean up the financial mess we’ve made. Hopefully that can be done through attrition rather than layoffs to give more of a soft landing than a hard bump.
In the mean time, the Council needs to think long and hard about their ideas of revenue, expenditures, long-term liabilities, rate and most importantly, value.
“Reduce spending”, “increase efficiency”, “raise revenue”, “decrease the tax rate” and many of the other phrases used in this and previous budget negotiations are empty political rhetoric unless they include specific proposals backed by accurate data that adds real measurable value to the citizens of Memphis, not conventional wisdom or ideological flights of fancy. Sure, it makes for a great sound byte for the media, but it doesn’t mean anything until there’s some real meat on the bone. I hope all parties concerned will take that to heart.
For reasons unknown to anyone, the Mayor seems to have decided to let the City Council drive the bus. Hopefully, they’ll find a place to stop, get a map, and take us somewhere we can at least deal with for a while…that isn’t FantasyLand.
I can’t clap to keep Tinkerbell alive any longer.