Tuesday, June 22, 2004

The CA, At Last, on the County Budget

The Commercial Appeal at last weighs in on the County budget mess, but not without hitting their favorite new hobby-horse first.
PICTURE A doughnut whose hole is getting wider. For almost every new home or business built on the county's periphery, the hole grows a little larger. That's what is sometimes called "growth" in Shelby County. In fact, growth has been inconsequential. The population increased by 8.6 percent through the 1990s and by an estimated 1 percent between 2000 and 2003.

There has been a huge shift in investment and population, however. County government is now $1.6 billion in debt, largely due to the demand for new infrastructure, particularly schools, created by so-called "growth."
A nice, but failed, bit of misdirection going on here. If you're going to play the "big picture" game, then let's also look at the growth of the counties surrounding Shelby (here, here and here). You'll see explosive growth all over, except Crittenden for some reason. For the whole region, yes, there's been growth. Everywhere except the City of Memphis.

The $1.6 billion figure elides the fact that much of that was money the County had to give to the City for school construction, money that effectively enriched the City schools at the cost of the County's financial health. The formula that leads to this continues to this day, unaddressed. For that matter, what has happened with the nearly one billion dollars that the City schools got for free from the County? I never hear about that....
It would be disingenuous to blame those who move to newly developing areas for the debt. They're trying to lower their tax bills, acting on their perceptions about inner-city crime or schools, looking for more affordable housing or simply exercising their freedom of choice. There have been some shoddy home building practices, but by and large it would be wrong to blame the builders and developers who are in business to meet that demand.
"Perceptions?" Try reality. No one I'm aware of is saying the City schools are adequate to the task of educationing all Memphis children. Neither is crime a "perception;" it's a reality of everyday life in the city, especially for black Memphis.

I also love how the paper quickly removes the developers and builders from any blame. Could it be that the Commercial Appeal's revenue stream would be crippled if they decided to protest any investigations or criticisms of them? Ah, let's not be "disingenuous." After all, it's not like the City Council could encourage the Zoning Board to rewrite the rules to make building more favorable in the middle-area of the City, or the Mayor could spear-head initiatives to get them back.
But it would be irresponsible for Shelby County's political leadership to continue to ignore the mounting debt problem and count on "growth" to solve it.

Shelby County Mayor A C Wharton might have created controversy but he has also opened a vital public discussion of the county's financial picture and possible solutions, which include a temporary halt to the issuance of new building permits in unincorporated areas of the county.
Which, as I've noted before, is County suicide. Look again at the growth numbers for the counties surounding Shelby. All a moratorium will do is spike property prices in the parts of the County where building can still proceed under already-issued permits, and send everyone else even farther out. Across county and state lines.

The problem isn't growth in Shelby County, but the City of Memphis and the way it conducts itself. Look at all the lavish spending on the downtown. Whatever is good there is good by the Commercial Appeal. The rest of the city is just left hanging, hoping for scraps of attention and money. Imagine a "tiger team" like the one that got us the FedExForum, but focused on education and the schools. It could happen, and would produce tremendous results, but where's the will for it? There isn't because there's no profit for the small cabal of...ahem, builders and developers...who have the inside track at City Hall.
While a moratorium is not a political certainly nor is one imminent, it has to be on the table. The county needs to find a way to develop a clear and intelligent strategy for development.

Shelby County is two years away from a rewritten set of building and zoning codes and ordinances that could prove useful in the battle against the county debt load bulge. It also may need time to develop a new approach toward school funding, and Wharton has properly launched a quest for new sources of revenue that could slow down the rapidly escalating property tax rate.
Controlling growth is too late. Anything tried now will cause county-skipping. Not to mention that a whole lot of newly-prosperous black Memphis will bang its head against that moratorium, then understandably cry "racism" as a result. Our sprawl is too far along, too mature, for controls.

School funding? I talked about that already, and the time for that was also a while back, but it's still never too late to change that one.

Has anyone compared the property tax rises against the rate of inflation? My guess is that it's not way out of sync with inflation and population growth in the County. If you compare Shelby County alone with other counties in Tennessee, we're in the high side of the middle. It's only for Memphians in Shelby County that we end up with the highest rate in the State. Hmmm....

Then there's the subtle prod by the paper for new taxes. It doesn't matter. All taxes of this sort still come out of one place: our wallets and pocketbooks. Perhaps a geographically targeted tax on new construction might be defensible, but the County is looking at an unconstitutional payroll tax in a typical over-reach. Putting a payroll tax in place only assures the flight of businesses across county and state lines, along with the population.
There are immediate budget problems that will have to be addressed in the meantime. The growing debt service is taking a larger bite out of the budget and forcing officials throughout county government to search for cost-cutting measures that are bound to reduce the level of service residents can expect.

But a comprehensive, long-term examination of alternatives will necessarily have to include possible new fees and taxes to help offset the public costs of suburban growth and inner-city decay as well as incentives that would help stop the hole in the doughnut from widening.
Why is Shelby County suddenly responsible for Memphis decay? Memphis put all its money into the downtown instead of spreading it around. Blame our Mayor and the weaklings on the City Council.
"Right now the only way we can build schools is I borrow money and repay it with property tax proceeds," Wharton told The Commercial Appeal's Kate Miller Morton. "The resounding message I'm getting here is don't increase property taxes. Right now that's the only game in town."
I'd like to feel sympathy, but none of this was a surprise to anyone since the middle of Rout's administration, and the Commercial Appeal wasn't making noises at him about "smart growth." That's a Wharton idea. He's trying to sell it, but it's a product no one is buying. The problem isn't the County today.

Fix the school funding formula, if you can wean Memphis off all that free money. Good luck there. Get the City to pay more attention to the areas outside the traditional downtown, especially newly annexed areas. In fact, slow down annexation so that the County can hang on to those property taxes!
The mayor recognizes the delicate nature of such an examination. A moratorium on new building permits, as well as any new development impact fees, real estate transfer taxes or the like could cause some potential investments to be diverted to faster growing areas such as Fayette, Tipton and DeSoto counties. The notion of slowing the growth in Shelby County suburbs is anathema to developers and builders.

But it doesn't sound at all bad to some suburban residents who wonder if school campuses crowded with temporary classrooms and frustrating traffic jams constitute a permanent way of life or a problem that local government is eventually going to solve.
What does it say about Memphis schools that people still move out to the County, even knowing that this is true? Again, the problem is Memphis, the corpulent giant sitting at the dinner table and monopolising all the food.

Perhaps Wharton ought to try teaming with Herenton on a renewed consolidation drive? That would eliminate a lot of the problems discussed here.

OK, OK, I'm kidding....
Urban sprawl is the product of many individuals exercising their right to choose where and how they want to live. Individually, their impact is small: One or two more children in a crowded school. Another car or two on a congested interstate that will have to be widened again soon. The loss of a few more trees in an area that seems to have plenty.

Collectively, however, these decisions lead to sprawl, which is costly in terms of the community's financial stability, its environment and its quality of life.

The conversation Mayor Wharton has started is necessary and useful. It was long overdue.
Notice how a discussion of the County's budget problem turned into a lecture on the mechanics of sprawl and the need to stop it? "Smart growth" is not an answer that will work now. Long range study of how the school age population will change in the future is first needed, to see how schools should be built and where. Then, repurposing of older schools; ie. making middle schools into elementary schools, etc. should be studied. Maybe even get really innovative and look at existing structures in the commercial and industrial realm to see what could be retrofitted less expensively than new construction?

Fixing Memphis is second. As long as the City unjustly sucks money from the County through the school funding formula, we'll be stuck with County budget problems. If the Commercial Appeal wants to argue that it hasn't been growth, but movement, then they should support this, right now. Flat growth or shrinkage in Memphis, if the paper really believes that, means shifting resources back out to the County, where the movement goes. N'est pas?

Governments can't "fix" people's behavior. That's social engineering and we see how it hasn't worked for almost fifty years now. Governments should adapt. They serve the needs of the people, not alter the people to serve its needs. Let's get governments that serve the people, not the cabal of developers and builders; let's get newspapers that do the same.

Make the City, not just the downtown, an attractive, safe, prosperous place with good neighborhoods served by good schools and you'll have people flock in. But if we keep the same lousy people at the top, serving the same circle of friends and contributors, then we'll never get there.

The Commercial Appeal opined earlier this year that we keep electing the same old folks over and over, expecting new results. When election time comes around this year remember that and see who the paper recommends for local government. Wanna take bets on who they support?

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