The Rent is Too Damn High (SCS Edition)

City Councilman Phillip Spinosa
City Councilman Phillip Spinosa
I guess it was just a matter of time.

Since the consolidation and then break-up of the local schools, the City Council has been pretty damn quiet about education…except to say that “we need it”.

Since 2008 the City has taken on a posture of extracting itself from the financial burden of funding education. The surrender of the City schools charter was the final nail in that coffin. Now one City Councilman thinks its time to charge the financially struggling Shelby County Schools some rent.

The Commercial Appeal reports that City Councilman Phillip Spinosa wants to make sure all City owned properties are “making a profit”…because, you know, profit is what government is all about.

Spinosa, whose entire k-12 educational experience was spent in private Catholic Schools, thinks its a good idea to help the city ensure profitability by charging the Shelby County Schools rent on buildings that were once part of the Memphis City Schools…i.e. damn near all of them.

That rent would net the city about $4 million according to the article.

This comes on the heels of a plan by SCS Superintendent Dorsey Hopson to shutter as many as seven schools due to low attendance and high upkeep costs.

One member of the SCS School Board expressed shock at the news. I’m not sure why he’s shocked. This is part of a continuing strategy by some city leaders to extract rents from as many organizations as possible to help “balance the budget” without having to do the heavy lifting of, you know, fixing the stuff that helped put us in the financial mess to begin with.

Rent-Seeking

Rent-seeking is the use of the resources of a company, an organization or an individual to obtain economic gain from others without reciprocating any benefits to society through wealth creation.

Preach
Preach
Spinosa’s plan, as reported by the Commercial Appeal, is classic “Rent-Seeking” behavior. No one really benefits from what he’s proposing, though I’m certain he doesn’t see it that way.

Here’s the reality.

The $4 million in rent Spinosa’s plan would extract from SCS would fund the salaries of 80-100 Teachers.

On the flip side, the $4 million the city collects would shave about .05 cents off the property tax rate, saving the median homeowner (valued at around $95,000 according to the US Census) in Memphis less than $14/year.

There will, no doubt, be a lot said about the benefits of this “potential” tax cut, and most of it is baloney. Rent won’t decrease. Your mortgage payment won’t decrease. But the number of teachers who are tasked with educating our children will decrease.

The truth is, any decrease in taxes will be swallowed up by landowners who charge rent for their land, not passed on to consumers as I’m sure Mr. Spinosa will claim. The current tax rate is already baked into lease agreements, so any savings will only help those at the top, not small business owners, or renters, or anyone else but landowners…and it won’t even help them that much.

In the business world we call this rent-seeking…and in both the figurative and literal sense, that’s exactly what this is.

Struggling School District

Shelby County Schools is already struggling. They’re not being funded by the state adequately. While the County Commission has softened their stance recently, they generally have had an adversarial relationship with local schools. And, the City has basically abdicated its responsibility over the past 30+ years to do the things necessary to provide a healthy living environment for nearly half of the city’s population that is either living in poverty or just one lost paycheck away from economic disaster.

Our land use policy, as set forth by the City Council and the County Commission, has stretched our resources to the limit, left thousands of blighted properties in its wake, and led to the closing of schools in communities that are struggling in the first place.

In the process, the hundreds of millions of dollars invested in infrastructure: from sewers to streets to schools, are being under-used, costing the City and County millions of dollars of property tax revenue annually.

Spinoza has only been in office for a year, so blaming him for this abject lack of vision is a stretch, but his plan only furthers that trend. If anything, this plan would force the County Schools to fast track the closing of as many City owned schools as possible to minimize the overall financial damage to the district.

This will only push our resources further out from the City’s core and shutter one the few community anchors many struggling neighborhoods have, causing even more problems in areas that already have too many.

Stop the Madness

As the City embarks on its Memphis 3.0 program, City leaders need to carefully consider the “unintended consequences” of actions like this.

There are several schools that have already been shuttered. Some of those are in a state of disrepair that makes them unsuitable for an educational environment, too expensive to maintain, or don’t have enough students to justify keeping them open.

That last issue is not the School Board’s fault. That falls on the shoulders of the City Council and County Commission’s lassiez-faire land use policy.

As we go down this road of crafting a land use plan, some 30 years too late, we need to consider our schools and work with the District and the County Commission to maximize the assets we currently have, instead of chasing population, which is what we’ve been doing since the mid-80’s.

How do we maximize the assets in place? What can we do to revitalize these neighborhoods and the community anchors (like schools) that can ultimately raise property values? Can some of these buildings that are no longer in use, be used to help people get their GED, job/technical training, or access other social services?

Maybe this is part of Spinoza’s plan. If so, he should have said so from the jump. Because what this looks like now is classic Memphis stinkin’ thinkin’…get what we can now, no matter how much it costs us later.

As we’ve seen over the past three decades, that’s no way to run a city, or work in the best interest of its citizens.

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