Commissioner Terry Roland

After the Shelby County Commission’s marathon 7 ½-hour special called meeting
JB

Key voter Eddie Jones

on the budget Monday night seemed to produce a consensus in favor of a $4.10-cent tax rate (with the final vote pending), Commissioners engaged in a much briefer discussion in committee on Wednesday.

They recapitulated the opposing positions in the far briefer span of 40 minutes, and this time reversed course with a 5-4 party-line vote in favor of a $4.13 rate — one that maintains a revenue base that the administration of Mayor Mark Luttrell regards as stable and that eschews the prospective tax cut that dominated discussion on Monday.

Wednesday’s vote was a pure party-line affair, with the Democrats present voting for the higher rate and the Republicans on hand going for the lower rate. To be sure, the regular Commission meeting scheduled for next Monday, when more Commissioners (probably all 13) will be present, could swing momentum back toward the tax-cut rate, but one fact argues against that.

The fact is that the Commission’s Republicans, at full strength and unified, add up to only 6 out of 13 members and usually need to peel away one Democrat or perhaps two to vote their way — in this case for the $4.10 rate and for a tax cut.

There are two inner-city Democratic Commissioners whose tendency to vote along with the GOP members is almost proverbial. They are Eddie Jones and Justin Ford, both of whom were being counted on by some key Republicans to cross over one more time. Ford was absent on Wednesday, but Jones was there, and he voted along with the other Democrats for the $4.13 tax rate.

Jones was one of the final speakers on the issue in Wednesday’s opening budget committee. His remarks — including a comment that Wednesday’s vote was “not the end of the road, just a fork in the road” — hinted at some residual flexibility on the issue. But, should he stick with the rest of the Democrats on Monday, and should Ford also hew to the party line, both the $4.10 rate and the suburban GOP dream of a tax cut are dead in the water

That outcome would suit the administration just fine. Harvey Kennedy, Luttrell’s CAO, began the tax-rate discussion Wednesday by commenting that, while the administration could make $4.10 work “if it’s the will of the body,” it continued to be opposed to the lower rate as too restrictive. And County finance director Wanda Richards added a warning that the $4.10 rate “down the road will increase our dependence on debt.

From that point on, a mini-version of Monday night’s lengthy debate ensued.

“Giving back to taxpayers” vs. “”a false narrative”

Millington Republican Terry Roland insisted that, during the seven years so far of his tenure, “this is the first chance we’ve had to give something back.” Germantown Commissioner Mark Billingsley argued in like manner: “I’d like to see us put a few dollars back in our citizens’ hands.”

Democrat Reginald Milton, whose special concern these days is public health, particularly the financial needs of Region One Hospital (formerly The Med), said he was “sympathetic” to taxpayers’ desire for some relief, but that, in view of the ongoing medical crisis, it would be “practical to maintain our dollars until we can see what happens.”

George Chism of Collierville would tilt back the other way. Focusing on the need for business and industrial expansion, he said that, for the sake of all citizens, “We gotta have some victories,” meaning a tax rate that would attract, rather than discourage, new investment.

Veteran Democrat Walter Bailey would have none of that, calling the idea of “giving back” a “false narrative:.” He put it baldly: “Rich people don’t need government. The working class and the poor need government services.” And service, he said, was “where we fail.”

After Roland and Republican Heidi Shafer weighed in again for the $4.10 rate (Shafer making a familiar argument that tax cuts spur growth), Bailey called for a vote, which ended with the aforesaid 5-4 outcome.

Van Turner, who as vice chair was presiding over the discussion, substituting for absent budget chair Steve Basar, then pointed out that, for procedural reasons, another vote had to be taken in order to complete the second reading of what was now an amended tax rate.

But first the Commissioners on hand then went through their appointed motions a second time. Roland began by seeming to suggest that, if necessary to support the lower tax rate, he would favor holding up on a prior vote to add 24 Sheriff’s deputies. Billingsley, who chairs the Commission’s law and order committee, said he, too, could “back away” on the new deputies and went on to interject an unexpected and potentially controversial argument.

Heat Over Community Grants and PILOTS

He turned the subject to something that had generated some unexpected heat during Monday’s prolonged debate — the matter of grants to putatively deserving local community causes and organizations. Mayor Luttrell professed hmself “troubled” and “gravely concerned” about how and whether the grants, administered by individual Commissioners from their own designated funds, were being accounted for.

“If you screw it up, you can go to the pokey,” Luttrell said, in support of adding a mechanism to monitor the grant process.

The process of allowing each of the 13 Commissioners to have a de facto fund for designating such outlays — called “community enhancement grants” — had been an innovation during this past fiscal year, one sponsored by Commissioner Milton, and on Monday he and the Mayor engaged in some intense sparring over the issue, with the Commissioner defending the purpose and accountability of the process.

Both Luttrell and Milton had grown hot under the collar, at various points each accusing the other of questioning his integrity.

Re-igniting the argument on Wednesday, Billingsley declared that, if necessary to create the possibility of a tax cut, “we cannot support the fluff,” and he spelled that out to mean the prospect of deleting the Commissioners’ individual community grants. (An amendment to that end by Bartlett Commissioner David Reaves had failed on Monday.)

Suddenly the Germantown Republican adopted a surprising and paradoxical-sounding rhetorical position. “I spend every day fighting for the poor,” he said, characterizing the proposed tax-cut rate as a question of “3 cents for the poor in Shelby County.” Roland chimed in that he, too, could be brought to support a “scorched-earth” policy.

Bailey pointed out what he regarded as the obvious, that cutting taxes was not a concern of the poor but that access to services was.

Both Jones and Roland continued in a populist vein and managed somehow to get on the same rhetorical page, though arguing for different tax-rate outcomes, with Jones denouncing the tax giveaways of the county’s PILOT (payment-in-lieu-of-taxes) arrangements and Roland thundering against the joint city/county EDGE board for its ability, independent of Commission oversight, to approve tax abatements.

Brief as that part of the discussion was, it augured a different, perhaps unifying theme that could potentially be picked up on Monday when, as Turner had said, either the $4.13 tax rate or the $4.10 rate could win out, in whichever case a final reading would be called for in a special called meeting for later next week.

Kennedy and Luttrell (r) listen as CFO Swift makes administraton case.

One of the most stressful meetings in the history of Shelby County government took place Monday at a County Commission meeting that saw:

(a) an organized walkout by one side of a divisive argument over the county budget and tax rate, followed by
(b) a response by the other side to reconstitute itself as the full committee — all of this after
(c) a dire warning from the County Finance Officer that a failure to agree could lead to a shutdown of county government and a defaulting on employee paychecks.

In the end, after five hours of this sort of high-stakes poker, the Commission would approve a $1.1 billion budget package that assumed a status quo property tax rate at the current level of $4.37, though resistance from an organized Republican minority prevented an actual vote of approval on second reading;. The Commission would also vote for a generous distribution of surplus tax revenues that nullified the GOP minority’s lingering hopes for a one-cent reduction in the tax rate.

It was a party-line struggle — though each side included one prominent member of the other party — and it further intensified a division which has existed since the formation of a new Commission after the 2014 county election but which had been dormant until disagreements over budget policy flared it up again.

In a strict sense, there had been little doubt as to the outcome of the conflict, since the administration of County Mayor Mark Luttrell, himself a Republican, had used its influence in both public and private ways to put the brakes on sentiment for a tax decrease, which five Republican members had sought ever since Luttrell had made a point of announcing the fact of a $6 million end-of-fiscal-year surplus.

At a marathon budget-committee session last month, Luttrell had stated his opposition to using part of the surplus to reduce a penny on the tax rate, insisting both that county infrastructure needs and blight-eradication efforts should come first and arguing for larger increases to specific county divisions — the Sheriff’s Department being prominent among them — than the Commission as a whole had seemed willing to grant.

Subsequently, claim such proponents of the tax decrease as GOP members Heidi Shafer and Terry Roland, Luttrell bargained privately with Commission members and managed to wean Republican outlier Steve Basar back into line with the Commission’s Democratic majority, recreating the de facto alliance with the Democrats that Basar had pursued last fall in response to a GOP majority’s dashing his hopes of becoming Commission chairman when it tilted instead toward Democrat Justin Ford, the eventual winner.

During the same period, chairman Ford had been allied with the Commission Republicans, and he voted consistently with them again in each of Monday’s showdown votes, which centered on a seemingly nonstop series of procedural issues. Basar was aligned again with the Democrats, and indeed it was he who began Monday’s consideration of the budget with a recipe for distribution of budget increases that the Democrats backed and that administration CAO Harvey Kennedy conferred his imprimatur on.

Because two Republican members, Mark Billingsley and David Reaves, were away on vacation, the GOP resistance on Monday was reduced to the scale of a guerilla insurrection led by Roland and Shafer, but one that, when joined on a given vote by Republican George Chism and Ford, could prevent the absolute majority of 7 that was needed for certain key measures to succeed

Thus was the second reading of the administration-preferred $4.37 tax rate held one vote short of success, though it will be back up for a third and decisive reading on July 1, which coincidentally is the first day of the new fiscal 2015-16 year.

And the magic number was thereby denied on a series of other votes on budget-related items, since the Democratic coalition was also hampered early in the meeting by the absence of member Eddie Jones.

Jones’ arrival late in the meeting created the conditions for a decisive majority of 7 and prompted Democrat Van Turner to reintroduce a somewhat modified version of the budget proposal Basar had made, and that version would be approved — but only after a grueling procedural struggle that required two prolonged recesses, innumerable rulings by County Attorney Ross Dyer and staff, and a moment of genuine crisis.

That moment had come, just before Jones had made the scene, when the two sides were deadlocked over the Democratic coalition’s effort to secure a budget vote and the GOP minority’s wish to opt instead for a continuing resolution that would allow current funding levels to continue. Another prospect for both sides was for a special called meeting sometime next week, but agreement on that, too, proved elusive.

It was then that CFO Mike Swift warned, on the basis of a Dyer ruling, that if the two sides could not agree, county government might well have to be shut down in early July and employee paychecks delayed or frozen.

Terry Roland argued for the Republican side that Dyer’s ruling was mistaken, that a continuing resolution could be achieved well after the beginning of the next fiscal year and that such late resolutions had occurred frequently in recent years.

Subsequently four members, Ford and Republicans Shafer Roland, and Chism, would absent themselves from their Commission seats, withdrawing to a back lounge area and thereby creating a temporary loss of quorum that could have aborted the meeting and put Swift’s warning to the test.

That was when Jones arrived, creating a new quorum, and the remaining members were in the process of re-forming the Commission, with Democrat Walter Bailey as the new chairman, when the four absentees returned. Not long thereafter, agreement would be reached on a budget, with the only holdouts being Shafer and Roland.

Seeming anarchy had been just around the bend, though, and it remains to be seen what will happen when the Commission meets on July 1 to consider a third and final vote on both tax rate and budget.

In other action, the Commission named Yolanda Kight from a field of several applicants to a vacancy on the county Judicial Commission. Kight prevailed after multiple ballots and see-saw voting by the Commission.

One of the innumerable recess colloquies that took place on Monday. (L to r: Commissioner Steve Basar, adiministration CAO Harvey Kennedy, and Commissioners Van Turner, Terry Roland, and George Chism