The following is an excerpt from our March issue:

By: Mike Ritz

When it comes to the upcoming challenges facing the County Commission, the biggest challenge we face will be financial. We have our hands full of potential property tax increases before the 2008 budget proposals come from the Mayor, other elected officials, and the City and County Schools.

For several months, Mayor Wharton has worked with the suburbs to increase ambulance service to the county outside the City of Memphis and Bartlett. (Those two cities operate their own ambulance services.) If that service contract amendment is approved by the County Commission, the cost of the $2,180,000 contract amendment will add 1.4 cents on the tax rate. The ambulance service proposed by Mayor Wharton may be dying as Germantown and Collierville may opt for their own service and the County bids out what is left.

In early January, the County Sheriff asked the County Commission to approve the hiring of an architect and contractor to build a county jail with a capacity for 4,000 inmates. His cost estimates were $60,000 per bed. A more realistic estimate is probably $80,000. The costs to the taxpayers will be at least $320,000,000. On a twenty year bond schedule, the cost to the taxpayers will add 14.8 cents on the tax rate. Sheriff Luttrell committed to working with our Committee in order to discuss his plans further. Most recently, Luttrell sent out a Requests for Proposals, detailing work he wants done before other alternatives have been discussed and the planning committee ever met.

A day later, at a joint Budget and Personnel Committee meeting, the Commission was informed of a $448,000,000 unfunded liability for retirees health insurance and life insurance. While the county retirement pension plan is solvent, the health and life insurance plans will need to have the benefits modified (reduced) or our taxpayers face an immediate and every year catch up price of $36,300,000 or 22.6 cents added to the property tax rate. The County administration has since proposed that (1) the retirees over 65 must use Medicare drug coverage; (2) the retirees pay a higher percentage of the health insurance premium; and (3) the maximum life insurance benefit for a retiree be $10,000. The Commission has not voted on this proposal which still leaves an annual $10,000,000 extra cost or 6.2 cents on the tax rate.

Later in January, the Mayor Wharton told our Emergency Communications Committee of his plan to improve ambulance service, fire service, and emergency communications for the entire County. While he shared no budget with the Committee, he told the media that the cost of his plan could be $100,000,000. That $100,000,000 price tag equates to 62.5 cents on the tax rate. To be fair, the Mayor did say that he would like to get some state authorization to help with this a fee, so it was not a property tax burden. However, he did not commit to delay implementation of the plan until he got the fee authorization from the state.

Are you keeping track? 1.4 cents + 14.8 cents + 22.6 cents or 6.2 cents+ 62.5 cents = $1.013 or 84.9 cents on the property tax rate. This Commissioner is not ready for this spending spree.

As noted above, all of these new money requests are before any consideration or presentation of the normal operating budget requests from the elected officials and the two school systems. The two school systems have some current capital needs approaching several hundred million dollars. The Regional Medical Hospital needs a $30,000,000 improvement to centralize and make more functional the trauma center operations and to make way for the expansion of the LeBonheur Hospital.

To help the property tax conscious citizen keep track, every new $100,000,000 in bonded capital spending costs the County taxpayers over the twenty years of the bond issue(s) 4.625 cents on the tax rate. Every $1,606,000 spent on new or expanded county governmental expenditures will cost an additional one cent on the tax rate.