County leaders consider sales tax increase

County leaders consider sales tax increase

(WMC-TV) – Shelby County leaders are considering a sales tax increase centering on the Memphis and Shelby County school merger.

The county is anticipating the public school's shortfall to range between $59 million and more than $100 million next year.

One commissioner is pushing to fill the gap now with a half-cent sales tax, but the mayor wants to hold tight until the merged school board makes good on a promise.

"If there is a countywide school tax, half of that money would go to schools," said Shelby County Commissioner Mike Ritz.

Ritz says the commission should consider putting a half-cent countywide sales tax on the ballot because county schools will be in the red next year.

"If we don't have a countywide sales tax, none of the sales tax will go to the Shelby County School system," he said.

The city is no longer required to pay an annual $57 million in school funding.

The tax increase would capture $30 million for schools.

Of that money, $7 million would go to the six county suburbs that will vote August 2 if they want to stop their merger with Memphis schools.

"I think it's premature to consider a tax increase," said Shelby County Mayor Mark Luttrell.

Mayor Mark Luttrell stopped by the meeting to share his position.

"What we do know is our maintenance of effort does not have to be determined for three years after the merger takes place," said Mayor Luttrell.

His mild delivery packed a forceful demand that they wait to fill the financial hole until the merged school board promises to follow the 172 merger recommendations laid out by the schools Transition Planning Commission.

"If I'm convinced that they embraced it, that they had the political, will to make the tough decisions, then we can see what the hole is," said Luttrell.

If the Shelby County Commission decides to have its own sales tax referendum and it passes in November, the city cannot raise its sales tax.

Therefore, Memphis would take in $23 million dollars instead of the $47 million they are hoping to get.

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