Press
Ritz Laments Pressure on County Government
ANDY MEEK | The Daily News
January 2, 2009
“You can’t do all this stuff. You can’t give it away and then say, ‘Well, the dire projections are going to go away, the moon’s going to open up and manna’s going to come down from heaven and everything’s going to be just fine.’”
– Mike Ritz
Shelby County Board of Commissioners member Mike Ritz – a licensed real estate broker and former head of the Memphis and Shelby County planning office – was not happy.
Seated a few feet away from him was Shelby County Mayor A C Wharton Jr., who at the commission’s meeting last week had just laid out a few reasons he favors a temporary bonus for county employees. With one eye toward the sea of red ink that appears certain to drench the county’s balance sheet this year and next, commissioners chose instead to revisit the issue of bonuses in early 2009.
The way the group came to that decision foreshadows a new year that will see the city and county legislative bodies come face to face with an unpleasant truth: The financial maelstrom that caused so much damage in 2008 likely will mean that even paring the city and county budgets down to their bare essentials still will probably leave the revenue side of the ledger short.
“You’re going to see when we go into the budget, we’re going to recommend what we call rolling layoffs,” Wharton said. “We’re going to have some days in which our offices probably will be closed for service. It’s going to be rough.”
Rough days ahead
It was in that setting that Wharton came before commissioners with the general notion of granting county employees a temporary bonus that would serve as a financial reward and an extra cost that wouldn’t have to be built into the budget from here on.
If the county finds it doesn’t have the financial breathing room to maintain the expense next year or the year after that, it can take the cost out of the budget. Salary increases, on the other hand, would be built into the budget going forward.
As soon as the mayor gave an overview of his idea, though, Ritz asked for permission to speak.
“All in all, I don’t think we should be doing any of this today,” he said. “Quite frankly, the money this would cost now would in my opinion be better used to avoid tax increases in fiscal year 2010 and 2011.
“If you all think that the dire projections that the mayor thought are going to disappear in the next six months, please go drink his Kool-Aid. Because that isn’t going to happen. You all know this. You know in your heart it isn’t going to happen.”
A few commissioners silently stared downward or into the distance as he spoke.
“Now, the seven or eight of you or whatever it takes to get a tax increase through here – if you all want to vote for this expense to our folks and then turn around and you’re going to vote ‘no’ on a tax increase, tell me how this is going to work out,” Ritz said. “Tell me how it’s going to work out.
“You can’t do all this stuff. You can’t give it away and then say, ‘Well, the dire projections are going to go away, the moon’s going to open up and manna’s going to come down from heaven and everything’s going to be just fine.’”
Commissioner Henri Brooks agreed with Ritz’ long-term view of the problem, but said that county employees need some sort of reward in the short-term. “The bank is already broken,” is how she described the problem.
Said Wharton, “I know that whatever way this goes, the administration will be the bad guy in this. And that’s no problem whatsoever, however you vote on it. I will say this. Those who’ve expressed sentiments with where we’re going in the future, you are dead right.
“There are things that haven’t even hit the table yet. ... My job is to tell you what we’re facing, and to tell you what we can reasonably do.”
The broken bank
The reason local governments are feeling a financial squeeze is related to everything from slumping sales tax revenue to a drop in real estate-related taxes and fees. There’s also a big wildcard in 2009 – the next countywide reappraisal in Shelby County, the process that occurs every four years and involves adjusting the real estate values on all the properties in the county.
November revenue collections released by the state of Tennessee earlier in December show that for the five-month period of July through November, the state reported $7.8 million in realty transfer and mortgage tax revenue for Shelby County. That’s down about 40 percent from the same period in 2007, when the state reported $12.6 million for the county.
A few days before county commissioners held their own discussion about employee bonuses in the midst of the tight environment, Memphis City Council members were faced with a similar proposal. The council had on its plate an appropriation of $2.4 million for a literacy program to benefit Memphis City Schools students.
The group ended up approving the funding, but did so with wariness about what the city’s economic situation will be in the coming year.
“I do plan to vote for this, but we’re going to have to be even more diligent in what happens going into 2009 and 2010,” said City Council member Kemp Conrad.
Ritz told his fellow county commissioners, meanwhile, that the current economic realities mean the county needs to be more prudent than it’s been in a long time.
“Ladies and gentlemen, we’ve got to just stop giving it away,” Ritz said. “We seem to be on this merry-go-round that something’s going to show up and rescue us. The only thing that’s going to rescue us the way we’re going is seven or eight of you voting for a tax increase. And I’m going to wear you out in June and July when it happens.”
