Memphis budget back and forth raises questions about long-term plans, vision for the City among other things

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.

Footloose and fancy free

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.

Comptroller Complications

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.

In the midst of that angst, a powder keg was ignited when the Comptroller’s report came out on May 22nd (read the whole report here).

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.

What’s the long-term vision?

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.

So I’m pretty sure there are some City Council members that think I was excessively hard on them in my last post. Maybe I was, maybe I wasn’t. I said what I meant and I meant what I said, that’s the best anyone can do.

I am, and have been frustrated that this council has really done little to address quality of life issues for our most needy people. It seems that closing community centers and cutting staff is the first thing that comes to mind with this Council when the budget is tight. I understand that payroll is the single largest expense the City has and considering the population contraction, decades of unbridled expansion, and neglect of neighborhoods in the City core, some services may need to be curtailed.

That said, those problems are the direct result of a lack of leadership and direction from City Hall that started long before Herenton and has continued, for the most part. While I understand that 9 members are in their first terms and probably feel these problems started before they came on the scene, I think its clear we’re still caught in the same mindset that got us into this mess.

With the 2010 Census came confirmation that Memphis has lost a fair amount of population density. This wasn’t a surprise, you can drive through just about any neighborhood and figure that out. Despite the lack of density, the size of Memphis hasn’t gotten any smaller. We’re still the same number of square miles we were last year. Little has been done to motivate people to be a part of the in-fill necessary to reverse this trend, and ensure we’re getting a maximum bang for the buck on our infrastructure investments. I understand it took us a long time to get in this hole and it will take a long time to get out of it,

According to the 2010 Census there are over 41,500 unoccupied housing units in Memphis alone out of 292,000 units. Just under 52% of those units are owner occupied. This trails the national average by about 15%, which is nearly the same as the vacancy rate.

I understand that by and large these vacant residences are getting their property taxes paid. I understand Property Tax makes up about 41% of city revenue, so filling them doesn’t bring in instant money. But those new people will have to buy stuff, which will help the second biggest tax collection area, sales tax, which makes up about 15% of revenue. 41,500 new households with an average of 2.6 people will have a lot of crap to buy every year.

But I’m not sure if any Council members have driven through some of the neighborhoods with lots of homes for sale. Some of them are nice middle class areas that most folks would be proud to call home, others are once nice areas that have been allowed to deteriorate into hit or miss neighborhoods populated by unkempt rental property that ultimately detracts from the value of the owner occupied homes in the neighborhood.

I drive past many of these on my way to school each morning and I wonder why every fifth house or so is boarded up or has the entirety of someone’s belongings on the curb like the house was bulimic and just couldn’t hold it in any more. The neighborhood I speak of looks like the one I grew up in in North Little Rock, a once proud working class neighborhood near the tracks that got bought up by slumlords who care more about the rent check than the property or the people living in the property.

On the major arteries surrounding this neighborhood there are boarded up buildings and abandoned foundation pads of businesses long lost. Sometimes I see people congregating in these areas, or someone hocking T-shirts or shoes, but most of the time they just sit there, rubble of a retail center, or factory, or warehouse long lost in the decay of the inner city.

How are we going to create this mythical in-fill while this persists? Why do we allow property owners the luxury of leaving these forgotten lots unattended? What penalty do we impose for leaving these scars on our city? Most importantly, why don’t we reclaim this land, and work to fill these gaps with something that would contribute to the neighborhood and ultimately, the city.

I can’t decide if we don’t do this because it’s just too big or if we’re scared of the blowback from folks that own the land.

Instead of addressing the disease we strike out at the symptoms of our problems. Instead of working to build new revenue we focus on cutting expenses, which ultimately penalizes people who who top out at about $16/hr ($33k/yr) because they cost too much to pick up our trash. We plan to contract further by cutting Fire Department staff and equipment. We call this “right sizing” but really its a reaction to a long-term lack of vision that penalizes the very people whose work keeps the city going.

Through all of this the media gives lip service to the token solutions that are put forward in one breath and then trains their eye on some trivial crap that looks good, but is less than .00001% of the total City budget, as if cutting that would solve anything.

And I admit that I’m as guilty as anyone of getting swept up in the tide of this insignificant crap more often than I wish I would.

So while I wish there was some better vision out there, I know that any land reclamation or redevelopment will take a long time to pay off.

In the mean time, the City Government will have to adjust service levels to the population of the city. This means that all 17 City divisions will have to become lean, mean, and highly efficient. This means that, like all of us, some of those workers will have to do more, better and faster. It doesn’t mean these reforms have to turn into an attack on unions a la Councilman Kemp Conrad’s sanitation solution. It means that there has to be cooperation between management and the workers to deliver exceptional service. There has to be accountability. Processes have to be streamlined, transparency has to become more than just lip service, and some positions will have to be eliminated, hopefully through regular attrition rather than furloughs and layoffs that will ultimately increase our already high unemployment rate.

With all that said, it also means that there will have to be some kind of tax increase, and if that’s all people can think about then they’re too selfish to see the real pain people of far lesser means feel in this city every day, not just twice a year when City and County property taxes are taken out of their escrow accounts.

With all that said, I’m happy to pay a little more on my property taxes if I have a guarantee that the money will be spent in such a way that makes government more transparent and efficient. That should always be the arrangement with any government entity. You may think me a fool for saying this, but I have faith in this city and the belief that we all have a responsibility, beyond just paying taxes and expecting services. We have a responsibility to pay attention to what’s going on, beyond what the media feels like reporting. We have a responsibility to understand the process and crawl up someone’s ass when we feel like they’re doing the wrong thing. Through all of that, we have a responsibility to give the city a chance to change and become agents for that change.

Until that happens, nothing will happen.

Maybe one day the City Council, as a body, will decide to take up that mantle and lead with it…but I’m not holding my breath.

One of these lucky Memphis City Council members could have the pleasure of running against me, if only they would reveal their plans for redistricting their seats. Despite pleas from supporters, I can only run against one of them.

Obviously, being that I am but a lowly blogger, I have some preferences. But until they decide who gets the honor, I’m putting the choice up to you. Make that choice, in the comments.

Sorry Councilmen Collins, Ford, Boyd and Morrison. Apparently I live no where near your districts. It’s your loss.

If you don’t know what I’m talking about, read this post, then go here, then come back and vote.

Wanda Halbert	Jim Strickland	Barbara Swearengen Ware
Joe Brown	Janis Fullilove	Myron Lowery
Kemp Conrad	Shea Flinn	Reid Hedgepeth

Two months ago I wrote about the changes that have been going on in my life this year. Needless to say, it’s been interesting so far, and signs point to more interesting developments over the coming months. My recent absence from this blog and the twitter are partially the result of a wacky work schedule and a concerted effort to start down the path of many of the changes I talked about in that August post.

Aside from working my ass off, I’ve also been preparing to sell my house. This is by necessity more than anything else. While my original plan was to continue working and traveling through my first part-time semester back in college, the outlook on the work front isn’t that promising, so I’ve been looking at other avenues.

This is how life goes, and while it’s frustrating and challenging, I feel very hopeful and positive about what has happened so far, and what will inevitably be coming down the pike.

Through all of this, I’ve had little time to devote to the reading necessary to write. Longtime readers of this blog know that while I write a lot of opinion pieces, I usually make a concerted effort to source my material with as many supporting links as possible. I feel this is necessary because opinions ARE like assholes, everyone has one, but opinions pieces backed up by sources don’t necessarily suffer the problems that plague the typical opinionated blog post. This may sound a little arrogant, but I like to back up my opinions because I feel it not only makes them stronger to you the reader, but it also allows me the time to better formulate and hopefully strengthen my argument.

The downside of this is that it takes a REALLY LONG TIME to write…well, anything. Between work and work on my house, I really haven’t had the time. To be honest, even though the work I’ve been doing on the house has largely been of the manual labor sort, there’s a lot of thought that goes into the process, as well as a lot of Advil. I hope that I can get back to writing at the beginning of November, but I’m not making any promises.

In the course of all of this, I’ve also been re-evaluating just what I want this blog to be. For me Vibinc has been about advocacy, policy and politics from a decidedly liberal perspective. I don’t see that changing anytime soon, though I am looking at ways to better focus my attentions and perspectives to things that effect not only the way we live here in Memphis and Tennessee, but also the way we perceive the political environment in our community. I’m not really sure how this will manifest itself, or where it will take me, but I think it’s an interesting path to pursue.

Even though I’m re-evaluating the blog, that doesn’t mean I don’t have some things to say about the election Thursday. I know I promised some people, including @ MphsBlckPolitcs to write about it in the run-up to the election, but for the reasons listed above I never quite made it past the incubation stage. So, consider this a Post-Mortem of the election if you will…

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If you didn’t see the complete and total landslide that was Thursday’s election coming, then you aren’t really paying that much attention to local politics. Back at the beginning of the campaign I said that someone (presumably Wharton) could win with only 30% of the vote considering the large field. Under normal circumstances this could have been the case, but the abbreviated nature of the campaign and the strength exhibited by the Wharton camp made that circumstance highly unlikely.

As Mayor Pro Tem Myron Lowery said election night, AC Wharton has been running since the 2007 Mayoral election, had more money than anyone, and a better organization. This is neither “interesting” nor “odd” nor any other descriptor that would cast doubt on the election results. AC’s campaign organization was ready, and no one else’s was. As a result, EVERYONE that got into the race after the retirement announcement of Mayor Herenton was stuck in a situation that made winning a virtually impossible task.

There were some surprises…

Myron Lowery’s strong showing, despite a late start and a small war chest showed that, given more time, he could have made a run at Wharton. I like much of what Lowery has done so far and hope that Wharton will take note of some of the changes that have taken place at City Hall over the past two months and maintain them through his administration. On the flip side, I’m glad that Lowery will be returning to the City Council. For all his faults, Lowery can be a calming voice on a body that can be quite contentious from time to time.

Carol Chumney’s third place finish should be a wake-up call for the former City Council member and State Legislator. Any rumors of her exit from future runs are not only premature, but also ignore her resolve. Carol wants to be a part of making Memphis better. Through her work in the state legislature and City Council this should be more than evident. However, Chumney suffers from a multi-faceted public perception problem. Part of this comes from what I called her ”cold and combative” posture at the first Mayoral debate. While Chumney did herself no favors in this first performance, media accounts, including my analysis of the first debate, perpetuated many of the long-held stereotypes of women seeking positions of power in the political realm.

As Mary Cashiola reported in the Memphis Flyer, “Women are twice as likely to be described emotionally in the media,” according to Erika Falk, author of Women for President: Media Bias in Eight Campaigns.

Folks, this has to stop. We need women and men of all races and socio-economic backgrounds to engage in the political process. The manner in which women, particularly strong, passionate women, are covered in the media is shameful, dismissive and downright ugly. As consumers of media, we deserve better. As candidates, women deserve to be treated with the same level of respect as their male counterparts. Snippets like this are simply dismissive and disrespectful. Not only is the quote used in the piece not bitter, it is a relevant critique of her political opponent that should have been researched rather than used as a blunt object to further a stereotype.

All that said, Chumney did commit some serious tactical errors that likely led to her weak showing at the polls. First and foremost, the early lack of any clear messaging from her campaign, despite a run less than two years before, allowed her opponents to get a jump on her in an area where she could have shown early strength. Considering her strong showing in the 2007 race, the meme of the campaign should have been “Chumney vs. Wharton”. By allowing so much time to pass before any clear message emerged, Chumney ceded a great deal of ground to Wharton early, and Lowery late. Campaigns are about momentum, and unfortunately for the Chumney campaign, this early lack of momentum made the difficult task of overcoming a well-funded candidate even more difficult.

Charles Carpenter was the fourth place finisher, and while he only received 5% of the vote, there is little doubt that he will use this as a springboard for a future run. Carpenter brought some interesting ideas to the campaign, and even though I disagree with him on many of his campaign positions, I hope he continues to engage in local politics. We need all kinds of voices in the mix, even ones I disagree with.

While the rest of the field accounted for less than 7.5% of the total vote, their impact on the race shouldn’t be ignored, particularly from Lawler and Whalum. Both had potent messaging operations, though Whalum seemed to show more late momentum than Lawler. In the end, all the messaging in the world can’t overcome a strong, well run, and well-funded campaign.

Running for any office requires a level of intentional preparation that cannot be thrown together in three months. With the next Mayoral election just two years away, anyone considering a run should start making preparations now. Memphis is best served by a strong and diverse field of candidates competing to lead us forward, not the dominant dynasties of the far and recent past. It is through this competition of ideas that we can grow as a community. Without competition, comes stagnation like what we saw in the final years of the Herenton Administration. Regardless of the intentions of any elected official, it is critical that we foster this kind of competition going forward, lest we fall back into the patterns of the past, and allow the future to slip by us.

Tonight marked the first debate for the office of Mayor of Memphis. This was, quite simply 90 minutes of some of the most bizarre TV ever. The candidates present were required to have filed their petitions, which cut the field to nine. The candidates present were; Charles Carpenter, Carol Chumney, Wanda Halbert, Robert “Mongo” Hodges, Jerry Lawler, Myron Lowery, Kenneth Whalum, AC Wharton, and Sharon Webb.

Like I said, this was highly entertaining, if you take some time to suspend the reality that there is a possibility of a very strange outcome in the Mayoral race. There were some winners, and losers, and people that really had no business being there, or in public life for that matter. Here’s my rundown.

Winners

Myron Lowery – Myron totally exceeded my expectations earning him the top spot in my “Winners” column. There was nothing flashy about Myron’s presentation. His answers, for the most part, were concise and to the point. He tooted his own horn, but more to show that even as a “Mayor Pro Tem” he was taking the job seriously. Myron’s answers served to dispel some of the criticism levied on him by former Mayor Willie Herenton. He was sharp, that’s all there is to it.

AC Wharton – AC was polished and had it totally together, but that just earns him a second place finish in my mind. I’m being a little unfair because as the frontrunner expectations are higher than they probably should be. Still, expectations are part of the game and as the front-runner, AC is in a position of defending his frontrunner status. I think he defended his position tonight, but I don’t feel that he gained any ground. This is AC’s challenge as the frontrunner, gaining ground to reach a mandate, and that didn’t happen tonight.

Charles Carpenter – Carpenter comes in a distant third. He’s a winner because he did something to distinguish himself both from the field and from the shadow of his former candidate. I don’t agree with some of his positions, but his ability to articulate them coherently, puts him in the top three.

Losers

Jerry Lawler – The candidate with the most name recognition in the race, Lawler’s answers were short on substance. He started out clumsily, as if he was not comfortable with the format, and then relied on right wing talking points to further his cause. I respect Lawler’s commitment to Memphis, and his desire to make things better, but it might behoove him to spend some time working IN the city, through non-profits, etc. before he tries this again.

Carol Chumney – As the second place finisher in the 2007 Mayoral election, Chumney’s expectations were high. Unfortunately, she came off as cold and combative early on, and continued that trend throughout the debate, including an exchange with County Mayor AC Wharton involving the performance of City and County employees after the last big storm. Chumney had the opportunity to shine in this thing, with a polite, but firm, “I told ya so” message, that she never got to. Between that, her virtual absence from the campaign in the past month, and her lightly populated, but nicely designed site that she pimped in the debate, she’s got a big hill to climb to win this thing.

Kenneth Whalum Jr. – The best of the losers, Whalum also started off combative, and then relied on initiatives that he’s led to prop up his platform. Really, his message wasn’t horrible, but the way he delivered it was reminiscent of our most recent former Mayor, which was a turn-off. Also, his unwillingness to clear the air about the incident at his church this weekend raises questions that CANNOT be answered until he addresses them.

Not Worth Mentioning

Halbert, Hodges and Webb were the sideshow. Halbert came closest to being a real candidate, but just about every time she spoke, I found myself wondering what the hell she just said.

Hodges (Mongo) had several lines of the night, including arming people with Uzi’s, flushing the political class down the toilet like turds, and putting comic books and video games in Libraries.

Webb was disjointed and confused, and at one point, couldn’t answer a question because she couldn’t stop laughing, which I can understand considering the dumb stuff that was probably said right before her answer. Still, that’s no excuse, and she never really said much anyway.

Conclusion

The debate wasn’t a success or a failure, it was a sideshow. The inclusion of people that weren’t serious casts serious doubts on this part of the process. Still, it happened, and we have to live with it.

You can watch the debate here.