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County tax increase fails on third reading

It was a Shelby County commissioners meeting that ran more like a sporting match than a legislative session.

With one commissioner absent Monday afternoon and therefore ineligible to cast a vote, 12 of the commissioners tackled a third and final reading of a proposed tax increase ordinance. Objections and procedural complaints flew in from both sides at times. And with game-changing decisions at the last minute, the final score was somewhat surprising.

The board voted 5-7 to strike down Mayor Mark Luttrell Jr.’s $0.36 tax increase, which would have set the county’s rate at $4.38. Another $0.04 also would have been added for those property owners outside the city of Memphis. That amount would have gone to rural school debt.

But instead, the mayor and his executive team will have to take another look at a budget that he already considered to be bare bones.

“Well, it’s obviously back to the drawing board,” said Luttrell after the meeting. “I would just really caution the commissioners to be careful what they ask for, because with the decisions they’ve made today, they do not paint a good picture for our community.”

The tax rate has been a point of contention for months. Because property values in Shelby County actually decreased when reassessed in January, nearly all municipal legislators increased their tax rate just to keep revenue at the same level as last year.

But in the case of Shelby County, the certified rate increase — the amount that would have kept revenue for fiscal 2013-2014 the same as fiscal 2012-2013 — was $0.30. The additional $0.06 was to be used to help fund part of the new Shelby County unified school district’s nearly $30 million budget gap.

That didn’t sit well with most of the Republicans on the board. They have kept the rate from increasing during the past two readings of the proposed ordinance. And Monday, two Democrats changed teams to help carry a sound bipartisan defeat of the tax rate increase.

Those Democrats — James Harvey Sr. and Justin Ford — joined Republicans Chris Thomas, Wyatt Bunker, Terry Roland, Steve Basar and Heidi Shafer to strike down the proposed ordinance. Republican Mike Ritz and Democrats Henri Brooks, Melvin Burgess, Walter Bailey and Steve Mulroy cast favorable votes.

The vote came nearly four hours after a meeting that started with commissioners trying to name a new chairman. Unable to do that early after several deadlocked votes, the board then voted to move that decision toward the end of the meeting just so the 22 people who showed up to address the commissioners would have a chance to speak.

What followed was a parade of sometimes passionate citizens and lobbyists on both sides of the debate. They urged commissioners to cast votes in favor of their causes and were, at times, critical of the commissioners for playing what many said they saw as political games.

And then the commissioners had their chance to speak.

“I’ve had nearly 100 e-mails from people against this increase,” said Thomas. “I will not be able to support it.”

Shafer, a former educator who said she supports teachers, handed out research she had done on property tax increases since 1992. In some cases, she said, properties in Shelby County had seen a more than 100 percent property tax increase rate during that time.

“Most of us are not attorneys making $650 per hour,” said Shafer. “Some of us are closer to making minimum wage.”

But Bailey, who has been on the board for decades, disagreed with the dissenters.

“These arguments get distorted and highly politicized,” he said. “It’s a minuscule increase and impact on taxes.”

Mulroy also said he supported the increase because the schools needed the money to continue to offer quality educational services.

“If you cut even further, you’re going to affect the actual classrooms,” said Mulroy. “I personally am not willing to take the meat axe to education or to public safety.”

Harvey said his reason for switching sides on the vote boiled down to listening to what he believes his constituents wanted him to do. He blamed much of the budget problems at the school district on the lack of financial responsibility from the City of Mecounty sealmphis. The city still owes the district $57 million it was court-ordered to pay but has not yet produced.

“And now, we have to pay the consequence of poor government on the other side of the street,” said Harvey.

Luttrell, who said that nearly 93 percent of the budget went to services other than education — such as public health and public safety — said he was surprised and disappointed by the result.

“There comes a time when you really have to strike a balance between taxes and services,” said Luttrell who is a Republican and generally does not like tax increases. “I think we provided a budget that struck that balance.”

The board’s decision means that the $374 million budget that went into effect on July 1 will continue until the commissioners and the mayor can come to an agreement. Exactly what that will be is still unknown, because the end result likely will be a compromise between those who want cuts and those who want to increase the tax rate. The school’s budget, also already in force as of July 1, may be in jeopardy, too.

“I think we’re going to have to get away from today for a day or so, sit down with some of the legislative leadership, the chairman, and some of the budget committee chairman, and in the cool of the evening, talk to them again about what it is we need to do to get this solved,” said Luttrell.

But because of mandated laws governing the number of times an ordinance must be read before adopted, and the need for special meetings to get the job done, that compromise won’t come until at least August. Meanwhile, the county is spending money at the proposed rate, but using a budget at the previous tax rate.

“Eventually, something is going to have to be established as the tax rate,” said Luttrell.

After hours of debate and several votes to try to keep at least a portion of the tax rate increase alive, the commissioners again returned to the issue of who would lead them as of Sept. 1.

It once again took several rounds of voting with nearly even votes between three candidates. But in the end, Harvey was tapped to replace Ritz as the board’s new chairman. Basar also was elected to an office position: As the chairman pro tempore.

Commissioners will meet again next week to discuss the budget and tax rate issues.

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