Weekly Update: Separating fact from fiction in City budgeting

Friends,

Budget season is almost upon us. On April 16, I’ll present our 2019-20 budget proposal to our partners on the City Council.

We’ll wait until then to unveil the particulars, but I’m taking time today to sort through fact from fiction as it relates to budgeting generally.

FACT: We must balance our budget every year. Unlike the federal government, our budget is much like yours at home: We can’t spend more than we have. Period.

It’s important to remember this when you hear others propose things we should do with our budget. That’s fine, of course, but these proposals often lack one important thing: a way to pay for them.

FICTION: Spending money on buildings like new fire stations and libraries means we have less to spend on public safety employees. While it’s often shorthanded as “the budget,” we actually have two budgets at City Hall — our operating budget and our capital budget.

We pay for things like salaries and supplies out of our operating budget. We take on (a responsible amount of) debt to pay for buildings and roads and police cars from our capital budget. Think of our operating budget like your checking account and our capital budget like your house mortgage. One manages your day-to-day life, and another is a 30-year plan to buy something big.

FACT: Years of high borrowing impacts our ability to do more with our general fund. When you pay your property taxes, roughly one third of that goes to pay for debt. Only two-thirds of it goes to our general fund. So yes, years of past debt impact us today.

We’re borrowing much less now and are in a new phase of fiscal discipline, and we expect that debt burden to noticeably decrease in another decade or so. But until then, this is our reality.

FICTION: The money we’re planning to spend on things like the Fairgrounds and the Riverfront could be spent on core services like public safety. Nope. We’re funding those tourism-related projects through mechanisms like the Tourism Development Zone, which redirect largely state sales taxes back to pay for the projects themselves. By state law, those projects can only be tourism projects.

Some have seemingly made a living telling you the exact opposite of this. Either they don’t understand the concept, or they’re trying to purposely mislead you. In fact, the very notion that we seek tools like TDZs to pay for items like these — as opposed to general fund or capital dollars — means we prioritize regular tax proceeds for the very things for which you want us to prioritize them (police, fire, core services).

FACT: Our public safety employees are better compensated compared to the time I took office. Including the 3 percent pay increases I’m proposing for commissioned police and fire employees, public safety employees will have received total raises ranging from 9 percent for Fire and 8.75 to 10.75 percent for Police in our first four years. That came after a number of years without any raise at all, including a two-year pay cut from 2011 to 2013.

We have more work ahead of us, of course, but the progress is undeniable.

FICTION: Our finances are in bad shape. These kinds of headlines dominated City Hall coverage earlier this decade, but you’ll notice they’re not part of our current story — thanks to tough decisions made years ago and fiscal discipline. The state Comptroller has lauded our progress and rating agencies have upgraded us.

Now, money is certainly still very tight at City Hall, but we’re heading in the right direction.

FACT: Our budget prioritizes neighborhoods. I’ve already talked about how items like the TDZ, and not the general fund, pay for tourism developments. And, you know how much we’ve prioritized public safety, which benefits all neighborhoods. Additionally, our paving budget is proportionally spent throughout all areas of the city.

But this year, we’re taking it a step further. Our Community Catalyst Fund, which we announced back in January is the first fund I know of at City Hall in years, if not ever, that prioritizes direct City investment into neighborhoods that need it. It’ll be a recurring source of money that we hope to grow with partners in philanthropy to make even more of a difference in the neighborhoods that make our city great.

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Commemorating Dr. King: Thursday marked a somber, but important, day on the calendar in Memphis and across the world: the commemoration of Dr. Martin Luther King Jr.’s assassination in our city in 1968.

As I reflected on the life of Dr. King, I was reminded of his words of encouragement – “Everyone can be great … because everyone can serve … You only need a heart full of grace. A soul generated by love.”

Those words made me think of my wife, Melyne. She truly is wonderful!

For 3 years, she has volunteered at Dunbar Elementary School with the ARISE2Read program, while also working a full time job and being mother to our two children. The other night, a great group of women recognized Melyne for all she does to make Memphis better by raising funds for Dunbar.

When I saw Dunbar Principal Dr. Anniece Gentry at the event, she told me, “I love your wife!”. I think it’s because Melyne has a heart full of grace and a soul generated by love.

Yours,