Budget Shortfall Angering Council Members

Memphis, Tn - Memphis City Hall is being flipped topsy-turvy again by the results of fuzzy financial math. For what the city administration gaveth, it is once more forced to taketh away due to faulty financial projections. It's bound to make taxpayers wonder whose minding the store....Santa Claus or Ebenezer Scrooge?

"We can't take 4.6 percent away from our employees. Impose a one-time 18 cent tax increase in July and then in December give out Christmas bonuses because extra money was found. Then, late February be told that we're going to have a deficit this fiscal year. Something's wrong," said City Councilman Myron Lowery.

Just in time to get an overview of the city's latest financial crisis, the annual Memphis City Council/Wharton administration retreat is scheduled for this weekend. Considering Wharton's finance team is going to have to explain again why they opted to shell out six-million dollars in employee bonuses in part because they thought there was an operating surplus available. This despite strong warnings from some Council members the "good time" revenue projections might be deceiving. Now staring at a 17-million dollar sinkhole in those projections, for the administration and the majority of Council who magnanimously voted for the one-time bonus, the word "retreat" does seem highly appropriate doesn't it?

"Clearly we're having more problems on the revenue side because of the decrease in property values. So, everything's gonna have to be on the table," said City CAO George Little. "Property values are down. Sales tax collecting haven't been as strong as we would like. Course everybody on the one hand is enjoying low interest rates when they borrow money. But, that cuts down on what the city gets when we invest our money.

No doubt the "Fail-Safe" button in this situation could very well be the budget held-over implementation of the 18 percent property tax increase. If used it could generate nearly 20 million dollars, but then wouldn't be much help to offset the 47-million dollar projected revenue shortfall to start off the next fiscal year in July.

"This has got to stop. Our projections must be much more accurate. So, we can make sure the citizens have confidence in what we're doing," said Lowery.

Little agrees, "We've got plans to get us out of this fiscal year 12. Clearly it's not gonna leave us any room for error as we go into a challenging fiscal year 13."