Property tax cut, increased car registration fee included in Lee Harris’ proposed budget

Katherine Burgess, Memphis Commercial Appeal
·4 min read

Shelby County Mayor Lee Harris Wednesday proposed a fiscal year 2024 budget that, if approved by the Shelby County Commission, would include a reduction in property taxes for Shelby County residents.

The proposals are part of a “restructured budget” for the coming fiscal year, a budget that includes significant investments in two new high schools and the rebuild of Regional One. The budget has been faced with challenges, including growing needs for buildings and a drop in revenue due to a statutory sales tax ratio being applied to personal properties and state-assessed properties, resulting in an “unprecedented” 24% drop in revenues from those properties, Harris said.

That has created “a substantial red in the 2024 budget and revenue losses that are unavoidable,” Harris said. “But even with that, we’ve got to do more than respond to those challenges, we’ve got to leverage as many opportunities as possible.”

The $30 million increase from increased car registration fees would allow budget alignment, Harris said.

The new property tax proposed by Harris would be $3.38, a one-cent decrease from the current Shelby County property tax rate of $3.39 per $100 of assessed value.

“With your help, we have been able to run a tight ship,” Harris told commissioners in a presentation Wednesday. “In fact, the budget I propose to you today will include a property tax cut, the first proposed by a Shelby County mayor in many years.”

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The new fiscal year starts July 1. Before then, it is the task of the Shelby County Commission to hold budget hearings for various county departments, to consider and approve any amendments to Harris’ proposed budget and ultimately to pass the budget and a property tax rate.

Harris’ proposal makes significant investments in county buildings, raising the county’s capital improvements project (CIP) budget to $150 million from its previous cap of $75 million. That $75 million cap had been in place for several years in order to help the county bring down its debt.

The new budget includes an initial $9.9 million allotment to begin working on a new high school in Frayser as well as $36 million for a new high school in the Cordova area.

“I ask that you dream with me for a minute and imagine a major investment project and heavy equipment and perhaps cranes to go with it in Frayser in about 12-14 months from today,” Harris said. “These kinds of investments, investments in youth, family and neighborhoods are what our community have been demanding for a very long time.”

The municipal school districts will receive a proportional amount of capital dollars, based on a calculation using average daily attendance, Harris said.

The school construction will be financed through debt.

Another major investment is Shelby County’s contribution to building a new campus for Regional One Health, the area’s only level one trauma center. Harris has proposed a $350 million county contribution be split over five years and has said the county will continue to seek matching funds from the state.

“We want to make sure that Regional One is around for the next century,” Harris said.

Other hallmarks of Harris’ fiscal year 2024 budget include:

  • $450,000 for the District Attorney’s Office Justice Review Unit, which examines wrongful convictions and disproportionate sentences

  • Increased pay for public defenders

  • A $1 million commitment to a new violence interruption fund, following in the steps of the city of Memphis and Regional One Health, both of which have such programs

  • $500,000 dedicated toward a fire fee relief program for seniors, veterans and individuals with special needs

  • A $58 million contribution to the pension fund, fully meeting the fund’s obligation

  • The budget will utilize $17.1 million in federal COVID-19 relief funds as well as $9.8 million from the county’s fund balance

Whether the property tax reduction and increase in car registration fees will occur remains to be seen. Wednesday, after Harris’ presentation, some commissioners questioned the plan.

Commissioner Erika Sugarmon said she doesn’t think the property tax should be decreased by a cent, which brings in about $2.3 million in revenue, but called the car registration fee “regressive taxation” for people struggling with transit. Commissioner Charlie Caswell also said he worried about the loss in revenue from the one penny on the tax rate, particularly as the county needs more resources to combat crime.

Commissioner Mick Wright, however, said his constituents are very concerned about the high property tax rate and that he appreciated “showing some balance if we’re asking more in one area.”

Katherine Burgess covers government and religion. She can be reached at katherine.burgess@commercialappeal.com or followed on Twitter @kathsburgess.

This article originally appeared on Memphis Commercial Appeal: Shelby County's proposed budget includes property tax cut