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- Reassessing the priorities in the city and county budgets, tonight on Behind The Headlines.

[intense orchestral music] I'm Eric Barnes with The Daily Memphian.

Thanks for joining us.

We are in budget season right now, both the city, the county, as well as the suburbs.

And in this past week, a group of nonprofit community organizations came forward and called on both the City of Memphis and the County Commission, to rethink their spending priorities, to spend or invest more in various priorities as they see it.

And we have two members of that loose coalition of organizations who are with us tonight to talk about those spending priorities and how they see the budget.

First up is Cardell Orrin, Executive Director of Stand for Children, Tennessee.

Cardell thanks for being here.

- Thank you for having me, I appreciate being here.

- We also have Deveney Perry, Executive Director of BLDG Memphis.

Deveney thanks for joining us.

- Thank you so much.

- So for a little background, we've done a number of budget shows or I don't know, a couple lately for, for the those who maybe aren't as close to it as we are.

The city budget is about a $715 million operating budget.

Traditionally that's, what's been put on the table give or take about a $90 million capital budget.

This is a reappraisal year and I do a very bad version of the assessor's office in which I try to describe what's happened, when the property taxes are reappraised, by state law, communities across Tennessee counties and municipalities cannot raise, have to adjust their rates down or up in order that they don't see a windfall that the overall gross amount of tax revenue from property taxes stays roughly the same.

That means that the property tax rate in Memphis has gone down from $3.19 to $2.71.

And the county budget, which is similarly sized, about a little over $700 million county budget, nintey million dollar capital budget, with reappraisal that the property tax rate has gone down from 4.05 to 3.45.

That's what they have to do.

And then I will shut up and get Cardell and Deveney in on this.

But they are allowed to vote to increase taxes, to change that tax rate.

And so first up and I think I'll go to you first Cardell, if you would give us a real quick overview of what Stand For Children, your organization is.

I'll let Deveney do the same, and then we will get to the the various proposals you all put forward.

So I'll start with Cardell and Stand For Children.

- Yeah, so Stand For Children is a community organizing and advocacy organization.

We work with parents, community members, educators to get them involved in specifically education policy and justice policy and advocacy.

But across the board are really interested in education funding and how our community impacts, especially on young people in communities.

- And Deveney same question to you.

Just give us a quick overview and we'll talk more later but of what BLDG Memphis does.

- Yeah.

BLDG Memphis.

It stands for Build, Live, Develop and Grow.

We are a coalition of community development corporations across many Memphis neighborhoods.

We support the capacity building of our CDCs and our community development partners to do the equitable development work that brings about neighborhood revitalization in some of our really distressed neighborhoods in Memphis.

- And some of the other, I won't go about but Bill Dries, who isn't here with us today, but wrote about it in The Daily Memphian.

But some of the other groups that are in this coalition Decarcerate Memphis, MICA, Memphis Music Initiative, My Sistah's House, Homeless Organizing for Power and others have joined together to say and I'll turn to you Cardell first to say, what is it that you all are calling for in terms of spending, investing, and taxes?

- You know, the foundation of this work is kind of that age old quote, a budget is a moral document.

And so if we think of a budget as a moral document, it's a, what are our values?

What are our priorities?

What are the things that we treasure in our community?

And so looking at the budget and looking at the process that the city, county were going through, we felt like it was the same old, same old.

Like we continue to have the same old budgets kind of come up and no new investments, no really game-changing things happening.

So around the same time as a city and county were going through their hearings, we got together as a coalition of organizations working on some of these specific areas that we think are important around people and communities and workers and culture and engagement.

And said, well what would investments look like for us?

What do we think are important things to invest in?

And those include education, public transportation, affordable housing, pieces around workers and all workers getting salary increases rather than just police and fire.

So we brought all of these things together to put it into what we call the moral budget to say we can do investments.

And we, you know, kind of put it in, in a foundation way around supporting people, supporting community, supporting workers and building culture and engagement.

And we think that if we asked that question of what are we doing in those areas for our current budgets, we wouldn't get the answers that we want.

So we said how do we make it clear what the choices we are making are and what we'd like to see as a community in our budgets and investments from city and county.

- Good, Deveney how would you frame what you all are pushing for anything you would add?

- Yeah, I would definitely add that BLDG Memphis being really neighborhoods-specific in a lot of our work of our organizations our member organizations are really centered on how to increase neighborhood capacity as well as the households within neighborhoods.

How do you strengthen those households within neighborhoods?

So a lot of our work right now, is focused on affordable housing.

Right now we have a advocacy campaign to City Council to pass the mayor's recommendation for permanent and affordable, sorry, permanent annual funding to the Memphis Affordable Housing Trust Fund.

It turns out that we've had this trust fund now for three years and we've allocated $900,000 in the first round of that fiscal year.

It was zeroed out of the budget in the second fiscal year.

And we are now asking for permanent funding.

However, two-thirds of a penny of city's debt service gives us around $800,000.

The CDCs that are our members could really generate about three hundred new home builds a year if they have adequate funding.

And if we're talking about the average home cost is $100,000, and that subsidy gap in building affordable housing because of the appraisal issues, is between 25 and $50,000 which a CDC would really need to make an investment into the housing shortage that we experienced here in Memphis, we definitely will need around $11 million and that's our advocacy ask to City Council.

So our work within this larger topic around a moral budget we're really looking at all these different societal factors that really will generate income to both the municipal budgets, as well as to our households here in Memphis, so that there is economic opportunities spread throughout.

- Let me go through some of the proposal y'all touched on here.

This is from Bill's article in The Daily Memphian, that the, you all said, the coalition has said, leave the tax rates the same, but because property values have gone up, on average about 20% across the city and county, that would generate something like $140 million.

So people would pay the same tax rate.

Those whose properties values had gone up could see increases in their tax bills.

So about 20%.

You've proposed, I think, $30 million to MATA, 20 from the city, 10 from the county.

You mentioned Deveney the 11 million for affordable housing trust fund, eighty million I believe for, and you all can correct me, for funding and housing and services for people who are homeless.

Cardell mentioned that the raises that have been proposed right now for just fire and police be extended to all city workers.

And $30 million in public education.

Cardell, I'll go to, did I miss anything?

Is that the raw numbers?

- Those are all numbers in the big areas.

We've got a couple of other things that are around engagement.

So creating positions in county government around budget participation and civic engagement, but you hit on the high notes.

- And so far what has the reception been?

Has it been a stiff arm?

Has there been, have there been questions?

I mean, this is up to the City Council pretty much in the end.

How far have you gotten and how far do you think you might get?

- You know, as you all have reported on I think Bill has reported on, you know there are council members who are open to additional adjustments in the tax rate.

And looking at investments that could come from that.

So we've talked to some of the council members about the opportunities for that.

We've had some engagement with Mayor Harris and some of the county commissioners about the opportunities to see this come to fruition on the county side.

You know, I think that there's some openness to it.

I think that in a lot of ways, the conservative nature of the state, and like you said the state mandate to decrease the tax rate drastically when we have these reappraisals, that I think that there's other people who want to see the ability to take advantage of that wealth that's been created in our communities to invest it in other areas.

And the overwhelming message has just been such of such a conservative nature that you got to continue to decrease taxes, even though the state makes us decrease the tax rate, instead of adjusting it that you don't really look at where are the impacts going to be.

And we would say that the impacts are going to be mainly in those places that already have wealth and already have had investments, namely Downtown, Midtown Poplar Corridor, East Memphis.

And that you don't see property values going up as drastically in some of our other neighborhoods with the greatest needs.

You know, actually, you know, black neighborhoods for the most part that need investments and to get those neighborhoods to develop, we got to put investments in them.

And so many elected say, we want to do those investments but if we don't have the revenue, we can't do the investments.

And so it's a continuous cycle that we're trying to break out of.

- The other part of that conversation that over the 10-plus years that I've been doing Behind the Headlines and obviously Daily Memphian, Daily News before that, and I'll go to you on this Deveney and get your perspective.

You know again and again and again, whenever I have had business leaders on or business people on, a lot of the economic development people, they will say, well, our taxes are too high.

So we were not competitive with Nashville, which has lower taxes.

We're not competitive with other cities that have taxes, that we need to get our taxes four dollars at the county level has been this magic number to get under, three dollars, as you know, people always focus on, get it under that.

And both of that as proposed right now, based on the reappraisal and the reset, those things would happen.

And the argument that the business and economic development people, many of them make is, well if we get the tax rates down and we encourage a lot of investment, then people will benefit.

We'll bring jobs in, we'll bring investment in communities.

Do you, have you seen that happen?

Do you buy that argument about the benefits of lowering taxes?

- Yeah, I would say even outside of just lowering taxes, the notion that the business industry can generate economic opportunity for households without actually making the investment into households, so that they can generate economic opportunity through a self-sustained and self-sufficient way, I think is a pretty backwards way of thinking about it.

And there's also data now that says that Memphis 3.0 has several notions and points that it makes that our economic development strategy has been solely focused on site selection and bringing in businesses and those businesses generating tax dollars if we bring them in at very low rates.

However, what we do know is is that economic development strategy expands outside of just your larger corporations and your businesses and economic opportunities and economic activity is generated through neighborhoods and small businesses.

So I think that notion of taxes being lowered for larger entities outside of taxes going towards the direct support of our neighborhoods and those persons and households within our communities, I think we do need to kind of shift how we think about our taxes and where those dollars go how those dollars are set and also where we are making subsidies.

- Please, go ahead Cardell.

- This is a, you know, trickle down economics.

Like that's what our economic development strategy gets down to.

Whether we're talking about PILOTs, whether we're talking about this tax structure, that we're saying we have to cut taxes on for businesses to come in, for wealthy people to create jobs, to do all these things, it hasn't happened.

It didn't happen in our country when we tried it nationally.

It hasn't happened over the multiple decades that that's been the overwhelming, you know, strategy for our economic development strategy here in Memphis and Shelby County.

And we would say that it is not gonna create, you know, jobs in the future that doing the same thing over and over again and expecting different results is of course insane.

So we have to get out of that loop and we have to change it.

The other thing that I think is important is that we always talk about the comparison with other places in Tennessee, around our property taxes.

But if we start looking at tax burden, which is what we really should be looking at which is what sophisticated companies look at, then we would know that our tax burden is actually fairly low when we compare to peer cities.

That because we don't have an income tax, because their automobile fees are relatively lower even than Mississippi, that our tax burden is relatively low.

And this is the conversation that we should be changing to.

So we don't get caught in this, you know just hamster wheel of going on and on.

- I should point out as we record this on Wednesday, Tuesday night, I believe it was at the City Council, the city came forward and said, well, given some issues with federal funding, stimulus, COVID-related stimulus money, we actually have a $23 million shortfall.

I should have said that the top one was talking about the city budget numbers.

But to that stimulus money, that that stimulus money is going to be, it's kind of a moving target.

The federal guidance keeps coming on out.

The last time we had the CFO from the city on and the and Worth Morgan, the chair of the budget committee for the City of Memphis, they thought it was gonna be about 160 to $170 million.

Have you, I'll go to you Deveney.

I mean, have you seen any, that those uses of that money is pretty heavily restricted by the federal government.

It doesn't just go in the checking account and you can spend it on anything.

Is there an opportunity to get anything that, of your priorities from that bucket of federal money?

- From the COVID related funding, yes.

A significant amount of funding has gone to address housing needs, home repairs, as well as those that are experiencing evictions.

So the answer to that is yes.

However, with regard to the topic of sustainability, in having a set aside funding for those more, those issues that are very present and reoccurring and historical to Memphis neighborhoods, that's the funding that we are looking to redirect in the budget expenses.

- You walked right into a question I had about you all's proposals.

Are they proposals for ongoing funding?

Are they one-year proposals?

Are they three years?

Is it indefinite until the problem or the problems are solved?

I mean, help me on the math with that.

I guess I'll stay with Deveney for now.

And then I'll go to Cardell.

- Okay.

I think Cardell can really speak to the longer term strategy here.

- Yeah.

Cardell.

- Yeah.

So, you know, so it's split up.

So there is in the budget, and we try to do that, split like an actual budget.

There are some pieces that are ongoing that we think should be ongoing investments until it's solved.

Affordable housing, you know, transit has to be an ongoing investment.

So if we invest the 38 million, thirty-five million they say they need, like that's an ongoing piece of it.

They've got other investments that you can make.

Education of course, is something that you want to be sustainable and ongoing investments.

And there's other pieces there.

We do have some pieces in there where we make recommendations around ARP funding and where some of the federal dollars would go to and be more directly centered around people and communities, based on the COVID pandemic challenges that we face so far.

Rather than just consistently using them on the city side to plug the hole in the budget.

- Let me stay with funding and sort of the notion of found money, which is a terrible phrase and I shouldn't have said that but well I did.

But there is a windfall of sorts that the City of Memphis is going to pursue, which is bear with me, we talked about it with the CFO and Worth Morgan a couple of weeks ago, as debt service, you know, long-term debt that the city has had for various capital projects rolls off and is basically paid off, it frees up debt capacity for the City of Memphis.

And that the state has allowed the city to do.

And the city's identified $200 million in capital improvement projects.

Capital improvement, being not salaries, not operating money, but investments, anything from roads to buildings and parks and so on.

And we'll talk leading up to what those priorities should be.

They've got $200 million and through a whole lot of machinations, they are able to actually go ahead and get that $200 million now in debt and begin to pay, begin to spend it in the short term, but not have to begin to pay it back for five years.

And it will be 25-year debt.

Are the priorities and the priorities for that, they're calling it, they called it the debt cliff at one point, I think realized that was really bad branding.

And the city is now calling it Accelerate Memphis.

Again, there's $200 million.

It is, I'll do a real quick summary.

And I want to get ya'll's take on this.

Seventy-five million for neighborhood improvements, seventy-five million toward a still developing parks master plan, fifty million toward what they're referencing against city-wide assets like FedExForum, Mud Island, the old Melrose High School in Orange Mound.

I feel like I'm going over here, but there's a bunch of money for streetscapes and infrastructure, fiber for high-speed internet.

Buying the Old Twin, the Southwest Twin Drive-in movie theater for $4 million.

Seven point five million for affordable housing.

So let me go to Deveney.

I mean, there is housing in there.

There are neighborhood improvements in there, that's very much in, in the heart of what you all work on.

Separate from the budget priorities and the federal money, are you happy with the priorities as they've been laid out for this $200 million Accelerate Memphis plan?

- Accelerate Memphis from what's been explained to us it will largely follow the anchor strategy of Memphis 3.0 which we do support Memphis 3.0.

From our standpoint of community development corporations, we want to know and make sure that community development corporations who hold the visions for development in these communities and public investments in these communities, are at the decision-making table.

So now it comes down to who is leading the strategy to actually say what these investments will look like and what they will be.

We have a guide in Memphis 3.0 as a land-use planning guide.

However, when you actually talk about community equity, community autonomy, preservation of people and then also power and justice, how are community members, community development corporations really driving what these investments will look like, the impact that these investments will have on these communities?

Because we know that these investments being CIP, will be surrounding, or too, new or improving a current city infrastructure.

Or maybe something that is nearest to a private investment.

But the city infrastructure has to make improvements throughout communities.

Maybe that will leave some behind, and silo communities has always been a conversation with regard to investment.

But then also those areas where we know they're going to go maybe there are investments being made in some of those silo communities.

How are we making sure that those community members are again aware of it.

Going back to some of those strategies in Memphis 3.0, one of them is really about driving community engagement in public infrastructure investments.

How are we holding accountable to those measures that have been set forth and approved by the mayor and City Council?

Those are some of the things that are important to our coalition with regards to Accelerate Memphis.

- And I should say before I go to Cardell, that we're all close to Memphis 3.0, and we've done many shows over time, but by Memphis 3.0 is essentially what I would frame as a strategic plan for the city to guide where growth and development happens, where transportation is needed, and needs to be expanded, greenways, green spaces.

And so those are the high points, it's yeah.

I think you've got to, you can search Memphis 3.0 if you're interested in it's, it brought a lot of people together, has had a lot of buy-in by the City Council, the mayors, and so on.

It's not universally supported, but was very broadly supported.

Cardell back to Accelerate Memphis.

Do you support those priorities or do you know enough about the priorities?

It's a lot of bullet points right now, right?

I mean, it's a bullet points in some named locations.

It is not, I don't think anyone is pretending to believe that it is a fully baked executable plan.

It's broad strokes, but do you like the direction at least of Accelerate Memphis?

- I think it's a good start.

I think, you know this is something that we've always talked about, that we should have done this years ago.

Like these large scale, like bonded investments to give us the weight to do it.

We've seen it in other cities, especially around affordable housing.

This is where, when we talk about, you know less than a million dollars going to affordable housing trust fund.

And we look at other cities that are doing tens of millions of dollars.

Atlanta doing hundreds of millions of dollars just into affordable housing.

This is to say, this is a good start.

And there's additional funding that's available in this debt cliff that would allow you to take out another big bond like to do some of these things.

One of the challenges I think that Deveney detailed well was, how engaged is the community in this?

How do you set this out?

And are you parceling it out too much to really see the impact of the investments?

So that you can that you can see it impactful in developing neighborhoods and supporting neighborhoods.

And then again, going back to this piece around revenue and sustainability, if we don't break out of this cycle and idea that we can create revenue and make ongoing investments, we'll do this and it will be a one one-off and things will, will downgrade from there.

And we won't continue the investments that we need to do, to build off of this one-time kind of detailed piece of investment from Accelerate.

- Let me shift gears on you both a little bit for people not familiar with your organizations.

I'll stay with Cardell.

Give me a little more on, the folks listening, a little bit more about what Stand For Children does, when it's not advocating for different budget priorities.

- That's a lot of what we do with them.

- I screwed that up.

Thank you for calling you out on that, but go ahead.

- That's a lot of what we do around.

We've done it in the past around education priorities and fight for the budget.

A lot of the shift to the moral budget came from our work around what we call the Youth Education Success Fund.

So pushing for targeted investments on what we focus on, early literacy, health and mental health for young people and high school success.

So we work in those specific areas around that with schools and with the district, we also have started to engage around youth justice and justice-centered work to expand what we know is the need for justice and safety and wellness in our community.

And so that's the broadening out of working with other partners, other coalitions.

Because it's not just about like what happens in the school, but what happens broadly.

And we know we've got to change the culture here, move our community forward, so that we can see sustainable progress.

- Deveney you mentioned working with other CDCs, community development corporations.

If you would just do a quick what is a community development corporation, for people don't know and what all BLDG Memphis does?

- Yeah.

So community development corporation is an organization situated in a boundary area of a neighborhood that needs added capacity.

And it may be experiencing the ramifications of poverty to it's infrastructure, it's housing and things of that nature.

So a CDC is a 501[c][3] organization.

It is a not-for-profit, but they are doing development and they're charged with the development and also some of the social elements within a neighborhood and community.

BLDG Memphis again, we are a coalition of CDCs and other community development partners.

And we are working on, we have annual policy agendas, affordable housing is one of those, transportation and mobility.

We are really big advocates of pedestrian safety as Shelby County has the largest number of pedestrian homicides, and vehicular violence in Shelby, in the state of Tennessee.

So those are something that that's something that's really important to us.

And a lot of the work that we do in the next quarter will be focused on pedestrian safety just to add to the affordable housing space that we're in right now.

- That is all the time we have this week.

Remember if you missed any of the show or if you want to watch a past episode, we talked about the budget, we talked about economic development recently.

Many of the issues we talked about here today.

Go to the WKNO website at wkno.org.

You can actually just search for Behind The Headlines WKNO on YouTube.

You can also download the full podcast of all the shows from The Daily Memphian site, iTunes, Spotify or wherever you get your podcasts.

This is the second to last show in my apartment thankfully.

I'm sick of looking at my apartment behind me, I'm sure you all are as well.

We'll be back in the studio in a couple of weeks and looking forward to that.

Thanks again.

And we will see you next week.

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