Without tax hike, Memphis forced to make cuts - WMC Action News 5 - Memphis, Tennessee

Without tax hike, Memphis forced to make cuts

The Memphis City Council voted down a one-time tax, but now the city is faced with the task of closing a $17 million shortfall in just three months. The Memphis City Council voted down a one-time tax, but now the city is faced with the task of closing a $17 million shortfall in just three months.

(WMC-TV) – The Memphis City Council voted down a one-time tax, but now the city is faced with the task of closing a $17 million shortfall in just three months.

The mayor scraped up $5 million in federal money to lessen the shortfall, but a freeze on hiring and new construction will continue.

But the biggest fallout from Tuesday night's tax hike alternative is the bite out of the city's reserves and the impact on sanitation workers.

The council adopted Councilman Kemp Conrad's plan to offset a tax increase Tuesday.

"We've got to restructure and resize city government once and for all," he said.

The main components of the Conrad compromise were to abolish the city sanitation worker buyout and to place the bulk of the shortfall on city reserves.

Councilwoman Janis Fullilove was always against the buyout, calling it back-door privatization.

She asked Conrad to amend his new plan to offer 50 elderly sanitation workers retirement, since AFSCME workers opted out of the city retirement program years back.

"The wording in here is exactly as it was proposed," Conrad told Fullilove during the meeting. "I appreciate the sentiment, but the answer is no."

"You don't know what it's like to be poor," Fullilove replied.

"I wouldn't comment on my background because you don't know it all," Conrad fired back. "Know what you're talking about before you talk about my background."

Budget Chairman Jim Strickland agreed to add Fullilove's request to future budget talks, which means big changes may still come to sanitation operations in the next budget cycle.

"We can have a separate budget meeting on that one issue," Strickland said.

And when it came to using $10.2 million in reserves, council members said the rainy day reserve fund is meant for days like this.

"That doesn't pick on city workers," said Council member Lee Harris. "That doesn't pick on the taxpayer."

Conrad said it will not hurt the city's bond rating.

"At the end of the day, what the rating agencies want is 10 percent of that fiscal year's budget," he said. "This leaves us that, plus a $2 million cushion."

The resolution also cuts grant funds, which includes the city's Youth Ambassadors enrichment program. The cuts could mean 125 fewer children can join the program.

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