Mike Williams, president of the Memphis Police Association (MPA), has been a passionate champion in railing against the City Council’s mid-June vote embracing administration-proposed reductions in healthcare and retirement benefits for retirees and city employees.
On Wednesday morning at the Shelby County Schools building, hundreds of retired employees and their supporters converged at a meeting with certain anger and heightened concern for the future. Williams offered words of comfort and encouragement, assuring attendees that the fight was not over. Afterwards, Williams was stopped and thanked for his efforts on their behalf.
“I just want my four daughters to see me as a man of honesty and integrity. I want to be the kind of man they can be proud of,” Williams said in a one-on-one interview with The New Tri-State Defender.
For many, Williams has become the face of a fight pitting Mayor A C Wharton Jr. and the Council against retirees and city employees, most notably police officers and firefighters. The backdrop reflects employee- and retiree-benefits costs that threaten the city’s fiscal soundness.
Meanwhile, morale among police, firefighters and city employees is as low as many area residents can recall in recent memory. Protesters have voiced their displeasure in front of City hall and the Greater Memphis Chamber of Commerce. Police and firefighters have been calling in sick in unsettling numbers.
And, says Williams, it’s not even close to being done.
“Mayor Wharton is an attorney, and basically, what he has done is challenge the Memorandums of Agreement (MOAs), which have been in place long before he came to office,” said Williams.
“Tennessee is a ‘right to work’ state, and unions are not recognized. So police and firefighters cannot strike, but there were MOAs in place. We had signed contracts. As a matter of fact, we had just signed a new contract. The mayor just essentially said, ‘None of that matters. We’re going to cut what we want to cut anyway.’ We’re in federal court right now fighting, and this administration is paying outside attorneys $500 an hour of taxpayer money to represent them.’”
At the very core of budget disputes has been, according to Williams, the many millions of tax dollars allotted to PILOTs (Payments in lieu of taxes), a program of incentives and tax breaks for businesses in the private sector.
Rather than “claw some of that money back from these businesses, the city chose instead to put the burden of the deficits on our backs,” said Williams. “There is nothing right about that.”
Meanwhile, Mayor Wharton contends that things are not exactly as they seem to Williams and others. And the PILOTs initiative in particular has been good for the city, he says,
“The PILOT program is one of the few tools available to grow and attract jobs in the City of Memphis; we cannot stop offering them and expect to successfully compete with surrounding states that have income taxes and other recruiting tools,” said Wharton.
“While PILOTs are not ideal, PILOT recipients and their employees all pay property tax, sales tax, vehicle tax and other local taxes and fees to the city.”
According to Williams, PILOTs are not giving the returns being promised by businesses receiving these massive amounts of money. His answer?
“It’s very simple. I set before the City Council a plan that will generate $47 million immediately. I suggested that 80 percent of that should go to the Public Safety Fund so that pensions and other employee deficits can be addressed. The remaining 20 percent should go to Debt Services to address future deficits being anticipated. That remedy is simply to raise taxes half a cent. Put it to the people in a referendum. I believe citizens will pass it overwhelmingly.”
PILOTs are contractual obligations between a business and IDB/EDGE (Industrial Development Board/Economic Development Growth Engine), Center City Revenue Finance Corp./Downtown Memphis Commission, or the Memphis Health, Educational and Housing Facilities Board. Any change to existing PILOTs would require the approval of both parties.
“To try to unilaterally make changes to these contracts would likely result in lawsuits that we would probably lose,” Wharton wrote in response to a query by the TSD.
“I agree that we should make certain that companies comply with the terms of these contracts in terms of delivering the jobs and minority participation required.”
Wharton said the numbers prove that PILOTs are well worth the investment.
“For every PILOT we estimate the amount of local tax revenue these projects will generate and they significantly exceed the amount of tax abated,” Wharton wrote.
“For example, for the 27 PILOTs approved since EDGE was created, total anticipated local tax revenue over the life of those PILOTs is $567,956,305. Total anticipated property tax abatement over the life of those PILOTs is $229,004,854. Projected local tax revenues are nearly 2 ½ times property tax abatements. For example, IP will pay $226 million in taxes DURING the life of the PILOT. Nike will pay $105 million.”
Wharton said his administration is involved in numerous efforts, programs and activities to increase the numbers of Minority and Women Business Enterprises (MWBEs). As a result, the City of Memphis is spending more with minority vendors, he said.
“From FY2011 to 2012 the City achieved a 20 to 30 percent increase in certified MWBE spend on City contracts and purchases. While, it’s still not what I’d like for it to be, as you can see from the figures below, there continues to be a steady increase year after year.”
Here are the figures Wharton presented:
1. FY 2008 – $8,769,601
2. FY 2009 – not available
3. FY 2010 – not available
4. FY 2011 – 19,312,108
5. FY 2012 – 35,623,599 (FY2012 City had major CIP Project (Nonconnah Interceptor) with one of its certified MWBE vendors.)
6. FY 2013 – 34,244,629
7. FY 2014 – As of Feb. 2014 the spend is already at $20,453,300.