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- Taxes, spending, the Megasite and much more tonight on Behind the Headlines.

[intense orchestral music] I'm Eric Barnes with The Daily Memphian, and thanks for joining us as we are back in the studio after a really long time, a 60 or 65 shows from my apartment, so we are very happy to be back and very happy to have Toby Sells, The Memphis Flyer News Editor.

Thanks for being here.

- Good to be back.

- Absolutely, and Bill Dries, reporter with The Daily Memphian.

Thank you both for being here.

Let's continue our conversation, Bill, we were having last week and over the past month or so about taxes, where we are with the tax rate, where we are with reappraisal.

Maybe we start with the county that has a little bit more clarity on where they are and what's going on with the county budget, taxes, and so on.

- Yeah, there's still one more final vote to come, but the County Commission has now approved a one-cent tax hike.

That means that the pre or the re-certified property tax rate for Shelby County of $3.45 would go up one penny to $3.46.

A lot of debate, a seven and a half-hour commission session to get to that point as well as passing an operating budget, which included actually one of the highlights of it was $1.3 million in county funding for the Memphis Area Transit Authority among other things.

But the big headline, of course, in budget season is is there gonna be a property tax hike or not?

The county did do one cent.

- Right, it had fallen, because this is a reappraisal year, and the whole adjustment that happens from 4.05 down to 3.45 was the adjusted rate.

They added a penny back.

Was that as much in, were they trying to get more money or was there, there was some talk that that was as much a rounding issue and just sort of to make the numbers work.

- The rounding issue that I had really wasn't at play.

I think that for one cent, given that the Commission had earlier defeated a much larger property tax hike, I think that the discussion there, and I think the discussion in the other cities within Shelby County is basically that kind of broaching the topic on this, and of course the City Council did that in a much bigger way this past week in discussions.

- We'll bring Toby in this, we switch to the city.

I wanna come back to some stuff on the county, but we'll kinda blur them together a little bit.

The city is looking at a tax rate that based on the reappraisal go from 3.19 to 2.71.

But there's a lot of talk about well, we've got this windfall.

Some people are saying there are various interest groups out there saying, hey, let's leave the tax rate where it was and keep the tax rate up and use that money to invest in affordable housing, MATA, other things that from their point of view have been disinvested.

We've talked to a number of people a couple of weeks ago, which is still wkno.org, if you wanna watch that.

But Martavius Jones, the City Councilman has proposed kind of a middle space of drop the tax rate.

It will drop to 2.71 and then they could vote to increase it.

He's proposing something in the three million range with that money going to permanent raises for staff, housing trust fund for affordable housing and MATA, and then all that jives with the Poor People's Campaign and this whole conversation about where should taxes be and where should spending be focused.

- Really interesting, kind of new voice that came up in this year's budget season kind of late in the game, but the Coalition for a Moral Budget, it's a group of groups, including BLDG Memphis, My Sistah's House and a whole lot of others that came together that said, look, budgets are a moral document.

You know, these show where our priorities are and we should not lower the tax rate, keep it where it is now, use that money.

They said a windfall of about $40 million for the city and about $100 million for the county, let's take that money and invest it in our people.

Let's invest in everything from MATA to mental health to youth workforce development, to a whole raft of things that could be used to directly benefit the community.

And this idea kinda came out of the Black Lives Matter community when people started to take note that we spend so much money on police across the country, there was this kind of move to "Defund the Police."

And a lot of folks took that to mean, hey, let's just quit having a police department.

And that's absolutely not true.

These people, they just see that, as in Memphis, the biggest part of the budget that we spend money on is the police service.

Let's cut that a little bit and try to help people out of poverty.

Let's help people to not be criminals and things like that.

Let's really invest in the people.

And so that was a conversation last summer with Black Lives Matter.

This group kinda came in this year late in the budget season, and I've been covering budgets for a long time.

I've never seen a group like this ever come along and really propose something as detailed as what they were saying.

And it came along kind of late.

I was concerned that maybe they came along a little too late and that wasn't gonna happen, but Martavius Jones kinda picked up on it, kind of met the middle ground there and said, we're not gonna do everything that you said, but let's do some of it.

And so what he's proposing, 29-cent tax increase as it were, would help fund MATA and some of those other things that they really wanna do.

And so at least it got the attention of one lawmaker, I think, and I think that's just really interesting that this group could come along.

And so it may be makes it more interesting for budget seasons down the road.

And all of this came along, as on Monday, there was a rally at Civic Plaza.

The Poor People's Campaign launched a national campaign.

They want a moral budget for the federal budget, and they're calling it The Third Reconstruction, and in that, they wanna recognize that poor people have kinda gotten the short end of the stick and they claim there's 140 million poor people around the country that could be helped with this Third Reconstruction.

And with budget proposals much like the ones with the Moral Budget.

- And what this group calls a windfall, Bill, other people on the Council and elsewhere would just call it a tax increase, right?

Because in many people's homes, their values went up by adjusting the rate down.

It makes their tax bills maybe not exactly the same, but largely the same.

For some people, even going to $3 would be a pretty sizable increase.

What is the sense of the Council in terms of, I mean, are they dead set on going to this lowest tax group, you know, the low tax rate of 2.71 and just living within those means or are they open to some amount of tax increases?

- I think there is an opening for some amount of a tax increase.

From the Council comments on this past week in their committee discussion, there was no actual vote in the committee, but most of the Council members were there.

And from the discussion, there are some Council members who feel like there is a time to discuss a tax hike if not now coming up in the next tax season or perhaps in future years.

But several of the folks who were sympathetic to that said not a 29-cent tax hike.

And one of the more interesting things I think about this discussion is some of the pushback on the reasoning behind the re-certification of the property tax rate, as you know from having Cardell Orrin on this show recently who's the spokesperson and the lead person for the Moral Budget Coalition, his position is that leaving the tax rate at $4.50 is not a tax hike.

We should explain that the state requires local governments to reset their property tax rates, to take into account the values through the reappraisal process, the increase in values in most cases.

And so the state law is that the re-certified tax rate cannot create any more revenue than the old tax rate did with the previous values from other reappraisal.

The other big thing that happened-- - And so what we are talking about one second is they have to accept that rate as the county did, and then they can put forward an increase.

The county then put forward, the County Commission did a one-cent increase, and you're saying that the city, they've gotta accept this 2.71.

They could put forward, there's some conversation about some kind of tax increase above that 2.71.

- Right, if you want to have a tax rate that increases the amount of revenue, I won't get into either side whether it's a tax increase or not.

If you want a tax rate that increases the revenue that that local government receives, you have to propose that addition to the tax rate separately.

The other thing that happened at the County Commission that is a really big structural change to the way this is done is the County Commission, after three delayed votes previously, voted to move the reappraisal cycle from once every four years to every other year.

Every two years, there will be a reappraisal.

When you have a reappraisal, you then have a resetting of the property tax rate.

- That will have to be, it was what?

Eight to five votes, something like that.

All the Republicans on the County Commission vote against.

- It's a party-line vote.

- Very party-line vote.

It still has to be approved by the State Board of Equalization and the compt, state controller, not the comptroller.

Spelled comptroller, pronounced controller.

Don't email me, or you can.

It seems unlikely that, I mean, given the state's sort of dis-, I don't know, I have no knowledge of this.

It's just pure speculation that whether or not the State Board of Equalization or the comptroller would approve going to two years.

I think there are other counties in Tennessee that do it every two years.

Aren't there, or no?

- There aren't.

- This would be the first.

- Shelby County would be the first, Nashville does it every four years.

- And the argument for it from one point of view is, well, that's just an excuse.

I think the people voting against it, you catch the increase in property value sooner and it's a chance to maybe, you know, it increases people's property taxes on a more frequent basis.

Other people will say, well, it also catches downturns, right?

I mean, the property values before 2008 had gone up dramatically.

2008 hits, massive recession.

The city had no choice, and county, no choice but to accept these very large tax or inflated values as we went into one of the worst recessions in decades.

And there was nothing they could really do about that.

So there, again, just to give some fair credit to both sides of the argument.

Well, if they do approve it and the state approves this two-year cycle, will the city then automatically follow suit?

Because it's in the county or the city and the suburbs?

I mean, will it influence them?

Will it impact them as well?

- Yes, all seven of the cities within Shelby County base their property tax rates on the county-wide reappraisal.

- Okay, so if they went to two years, it would, every Bartlett?

- Right, starting in 2023.

- Okay, and I mentioned Bartlett here.

We have the mayors of Bartlett and Collierville coming on next week to talk about their budgets and their, essentially, proposals for tax increases, which is kind of surprising when the suburbs are increasing taxes and the city and county at this point at least look like they're decreasing it.

We also got a little more clarity on an unclear situation.

A $160 million in federal money that go to the city, that came into play also because some City Council people said, wait, we don't wanna adjust the tax rate right now or change our spending 'cause it could impact the $160 million.

- And the administration did, too.

The city had put in its original budget proposal from Mayor Jim Strickland.

$18 million use of the American Rescue Plan Act funding into his budget proposal.

Then the administration said, well, wait a minute.

We calculated this based on drops in revenue by individual line items that turns out the federal officials are judging what we can use for revenue replacement by our overall revenues, including a half-cent sales tax hike enacted since the baseline year of 2019.

So what the city is going to do is it's going to set aside part of its reserve fund or fund balance to use in the event that the guidance from the federal government doesn't allow that.

They did the same thing with the CARES Act money and an even greater amount and wound up never, never touching that amount.

They're fairly confident that once the calculations begin, the calculations they'd count at the federal level, that they'll be okay.

- All right, we'll shift.

I mentioned at the top of the show, Toby, the Megasite, the big industrial site.

They call it the Memphis Megasite is the Memphis area, I guess, it's 50 miles from here, Haywood County.

It has been under construction in fits and starts 4,000 to 4,100 acres.

There are three big Megasites built, oh gosh, a decade ago.

One outside Chattanooga, eventually got a Volkswagen plant.

The Middle Tennessee one has had some success and some failures.

There was a Hemlock Semiconductor plant that was built with great fanfare and then ultimately went under.

But I think there's some other things on that Megasite, but there's never been anything on the Memphis one.

And one of the big arguments that the Chamber and the economic development people have gotten close, but they've either said that the state didn't put enough incentives in or the site isn't finished.

And big, whether you want them or not, the big sort of industrial tenants really don't wanna come into one where they've gotta invest in infrastructure or they've gotta wait for the infrastructure to be built out.

So somewhat out of the blue, it seemed to me, but maybe that was just me.

The governor said that he is pushing for $52 million to finish out the last big piece, as I understand it, of the Megasite, which is the wastewater and water infrastructure.

And this includes taking treated wastewater from that site all the way to the Mississippi River, which has been a point of contention with some property owners and environmentalist and so on.

- And at this point with Governor Lee, it kind of felt like he got all of his legislative duties kind of out of the way early in his term here.

Somebody was like, hey, how about that old Megasite idea?

And they kinda brought it down, blew it off.

And I'm like, yeah, this looks great.

So this week, totally out of the blue, $52 million to get this thing working.

The biggest piece of that is that wastewater line that needs to go across there.

The latest news that I could find about this was January 2021 and a story from the Jackson Sun, you had Bob Rolfe who's the Economic and Community Development Commissioner for the state was on a phone call with leaders out in Haywood County and Brownsville and said, hey, look, we've got all the easements necessary for this wastewater line.

We've got all the permits that we need and we're gonna get started building this thing and promise that, you know, we're gonna make forward motion.

Those folks just gave him an earful.

They said, look, you know, we've heard this promise before.

We've heard this song and dance before.

We need some proof that you're really gonna get on this.

And even the county mayor of Haywood County said at this point, East Tennessee and Middle Tennessee, they have these sites developed and we're feeling like the stepchild is what he said and we need your help.

And I couldn't find anything from then until this news release came out this week from Governor Lee.

And I've written a lot about the wastewater line that they need to get this thing started.

To be shovel-ready is what they say.

And in that line is an 18-inch diameter water line, wastewater line that would take human and industrial treated waste from the site, all the way to the Mississippi River.

And last time, I wrote about it in 2019, they had already moved the end point, once from Randolph to another site.

And it's gonna be three and a half million gallons of the stuff every day that this would put out there.

So if you're a community on the Mississippi River, you just don't want that.

And in Memphis, I think we kind of turn our brains off to how much pollution is actually in the river every day.

And so much of it is treated, but that's always been a major hangup point for them, but it sounds like they have everything in line.

And for all that pollution in there, there's kind of a rhyme that anybody that wants to put anything in the river, that kind of makes them feel better.

It says dilution is the pollution solution.

Just meaning that just the mighty Mississippi is gonna take care of all that stuff and kinda clean it up and all that.

And so there's just so much water in there that it's gonna be fine.

And even cities down river, they draw from the Mississippi River, treat it, and that's their drinking water.

But a study that came out this year, it's kind of an annual thing that I write about is all of that pollution does go into the Gulf of Mexico.

The Mississippi River is about 40% of all this stuff, creates this huge dead zone where fish and other marine life cannot live.

And this year, it's gonna be about the state of Connecticut which is smaller than it's been in the past.

At its largest, it was about the state of New Jersey.

- Yeah, before, I wanna use that to segue into the pipeline, but any other comments from you, Bill, on the Megasite?

I mean, when was it first built?

It was pre-Haslam?

- It was during the Bredesen administration.

This was Phil Bredesen's idea to have one Megasite in each of the state's grand divisions.

Bob Rolfe, the Commissioner of Economic and Community Development, was actually appointed to that position by Governor Haslam toward the end of his second term.

And when he appointed Rolfe to it, he said, getting the Megasite done, shovel-ready is your number one job.

Here we are.

And the other thing is, you know, I understand calling it the Memphis Regional Megasite, but one of the results of that name, it's not even in the next county-- - It's two counties away.

- It's two counties away.

And so state leaders who don't know that or who don't bother to look at a map, will come over here to Memphis and will start talking about the Memphis Megasite.

Yeah, we're gonna get that going.

We know you folks have been waiting.

No, we haven't.

We really, it's not, in terms of economic impact, people here don't think about it.

- They don't.

I will say, I mean, we've done shows and during the governor's race that Bill Lee ultimately won, I did a debate with the various Republican candidates, and economic development is big issue, it's a big issue for the Chamber.

That debate I did was co-sponsored by the Chamber of Commerce in Memphis.

The EDGE people, all the economic development people will say we need that Megasite.

And I don't know that they're right.

I'm just saying this is the argument they make is, yeah, it's not in Memphis, but if you get a big enough industrial site, there's a peripheral impact with all these other suppliers.

So Volkswagen in Chattanooga is the grand example.

It's not just Volkswagen.

it's the people who make components and relocate all their smaller plants, if not on the regional Megasite, maybe in Memphis, maybe in Frayser and then there's supply network and so on and so forth.

So that is their point of view on how it is a "Memphis", but it is good to point out that it is 50 miles away and what sort of impact that directly has on Memphis is not totally clear.

- And just before we leave it at that, they have made it pretty clear in Haywood County that what they're looking for, they're looking for an automobile manufacturer.

That's what they want.

It's not anything else, not semiconductors, anything else.

They're looking for a car plant.

- Yeah, which would make sense.

I've heard that argument because there is so much auto manufacturing that goes on in the area and it would just plug West Tennessee, if not Memphis, West Tennessee, into that whole network of, complex of car manufacturers and so on.

I wanna segue into the pipeline.

We will have Sarah Houston, who is the newly named Director of Protect our Aquifer on the show.

Jeff Warren, who's also a City Council, on the show in two weeks to talk about where we are with the pipeline and more broadly, with the kind of ongoing conversation about regulation in the broadest sense of, in a specific sense, of the aquifer, where are we with the pipeline?

This is the Byhalia pipeline, the oil pipeline, that Plains wants to bring through here.

Plains has made the pipeline, supporters make the argument that this is gonna bring jobs and it's gonna bring development.

And if you end regulation on this pipeline, you're gonna interrupt regulation on all kinds of pipelines.

The other side of it is said, hey, if there's a leak in this pipeline and it gets into the aquifer, it could be a disaster for Memphis and the region and our drinking water and so on.

That fight has been sort of raging.

Where are we, Bill?

- It basically took a break for budget season on the City Council and the County Commission.

Those are the two venues where you have two proposals pending that would allow local government to exert some control over where the pipeline goes and where it doesn't.

So on hold through agreement with Plains All American and the Byhalia Connection people, it is the final vote on an ordinance that would change the unified development code to allow for setbacks, requiring that the pipeline has to be 1,500 feet from parks, churches, schools, family recreation areas.

There's also another city ordinance that Jeff Warren is the co-sponsor of, along with Edmund Ford, Sr., that would create a pipeline review board on the city side to examine where these pipelines can go and issue reports and set up a whole permitting process for it.

So all of that's on hold.

Some of this is still in the courts, too, but basically it's on hold for budget season.

- Thoughts on where we are with this pipeline?

Now, I mean, we're in this holding pattern.

And I think some people are like, okay, great.

They're pausing and they're focused on the budget.

Others worry that there's some kind, something diabolical happening behind the scenes and some sort of deal's being cut.

It seems obvious, no matter what it's gonna end up, this is gonna be a long battle that ends up in the courts, right?

I mean, it just seems inevitable.

- Well, provided that there's not something like an alternate route that the company has worked at where it's already bought up all of the parcels of it and is just waiting to see how this plays out and then says, oh, okay, well, we've got this other route all set to go.

- Another big story that is a kind of long-term story is TVA and MLGW.

The question of MLGW moving from TVA, where are we on that?

- The RFP process, Request for Proposal process, to basically take price quotes and bids and plans from all of the companies that would build different parts of the new electric power supply system, if Light, Gas and Water leaves TVA is now out there and you have this company out of Marietta, Georgia, GDS Associates, which is overseeing that process of taking the price quotes including rates on power, as well as building power generation and what that looks like.

They're now in the process of taking that.

We should hear something back on that before the end of the year.

- Okay.

And the bridge.

So I was on the Memphis Flyer site actually this morning as we taped Tuesday.

And I saw, I think it was you right, Toby?

That you'd reposted this, a little video that TDOT had put out about the construction and the plan for the pipeline construction.

As of this time, we don't have a timeline for when the the Hernando de Soto Bridge will reopen, but definitely through July that the repairs are gonna go on.

And there's a little animation that goes with it.

And this is great TV, me describing this with my hands.

But it's a little animation.

And when I first turned it on, it didn't have the sound on.

And it's actually kind of useful about how they're gonna put some, you know, some, it looks like a little LEGO project, right?

- Yeah, it's like Pixar.

- It's like Pixar.

That alone, it's both helpful and honestly a little odd because it does make it look like Pixar or your kids or my kids playing with their LEGOs.

But it's okay, so I see it.

Then we played it with the music on and this music, which I cannot describe, - You loved it.

- It is, I don't know how you could pick more inappropriate music.

It made this seem like a happy, fun summer project.

- Yeah.

And I don't think, I don't know that anyone meant it that way.

I'm sure they didn't, but it does speak to, and this is me just opining, this is not based on anything other than, I wonder sometimes if the state and Arkansas is involved with this, too.

Arkansas DOT and Tennessee DOT, really understand what an impact this is.

Like the bridge is shut down.

It's been shut down for a month, and they're playing happy, fun music like it's summer camp, building trusses and repairing the bridge.

- And what gets me is whatever committee of people approved that music in there, they watched this thing with the sound on and they're like, yeah, that looks great, this is perfect.

Yeah, let's go with that.

- Right, that will make everyone kind of ignore that there are massive questions about how in the world this happened, the crack was there at least far back what?

2019, there are photos, if not earlier.

Tennessee is saying, well, that was Arkansas's responsibility.

They do the bridge inspections.

Arkansas is saying, well, we fired the person who missed that, but you gotta wonder, again, I'm opining.

What kind of management structure, what kind of supervision was in place that that crack, crack is not the word, that fracture could be there for so long with kayakers taking pictures of it, and no one noticed.

- Yeah, a very dangerous situation and one that's gonna impact our economy for a long time.

And that's the music they picked.

- Yeah, it was odd.

And again, you have to watch it.

It's on, it will be on The Daily Memphian at some point, following the Memphis Flyer and it's on Twitter.

And it's very odd.

A last wrap-up, last week, we talked about the really horrible scene where Tami Sawyer, County Commissioner was being harassed at the site of the Health Sciences Park and the Nathan Bedford Forrest remains and the pedestal being removed.

And there was a man singing "Dixie" and essentially threatening.

I shouldn't say essentially.

He was threatening Commissioner Sawyer.

A warrant was issued for what was a misdemeanor, a misdemeanor of some sort for a man-- - Misdemeanor assault.

- Who goes like by K-Rack who was, and we played that video last week.

It was very difficult to watch and no one should have to go through that.

And so that is just to put a note on that.

Thanks for joining us.

Thanks for being here.

Thanks to the studio.

I'm so glad to be back in here and not in my apartment.

Join us again next week and we'll see you then.

[intense orchestral music] [acoustic guitar chords]