Tax Talk

Look who’s paying (and not paying) what they owe.



One of the oldest exercises in journalism is defining news. An oldie but goodie is: A new bridge is news. If 100,000 cars cross it safely, that is not news. If a car goes off the bridge that is news. 

I propose to stand that on its head. Every day it seems that, metaphorically speaking, cars are going off the bridge — the economy, the housing market, the political system, the job market, the stock market, the worst economic downturn since the Great Depression. 

Digest all that and you might think Greater Memphis is broke, and that tax collections are drying up. But they aren’t. The proverbial 100,000 cars are safely crossing the bridge. That’s news. 

Times are definitely hard in Memphis and Shelby County. It has been four years since the housing bubble burst. The Memphis housing market was recently rated one of the ten worst in the country. Unemployment in the Memphis Metro area is 11 percent. Google “cities with most foreclosures” and Memphis is likely to come up. 

So it is not surprising that some homeowners and businesses are not paying their property taxes. What is surprising, however, is who is not paying them and who is paying them.

Shelby County Trustee David Lenoir collects county property taxes inside and outside the city of Memphis. Memphis city property taxes are collected by the city treasurer’s office. 

I met with Lenoir in his office recently. A graduate of Evangelical Christian School in Shelby County and the University of Alabama, where he played football and studied finance, Lenoir was elected in 2010. Gorged on doomsday headlines, I was expecting to hear that tax collections have gone off the cliff, or the bridge if you will. But they haven’t. 

Fiscal year 2011 collections were $756 million, which is 1 percent lower than the $768 million in 2010 but slightly higher than the forecasted $753 million and the budgeted $747 million for 2011. The percentage of billed property taxes that are collected — 94 percent — has varied by less than 1 percent for the last five years. 

The biggest single contributor to the shortfall was MLG&W, which makes a payment in lieu of taxes (PILOT) to the city of Memphis, which remits part of it to the county trustee. Lenoir is waiting on the city to deliver $5.8 million. 

“I am waiting to hear from Mayor Wharton,” he says. 

Call that one a fact of life in our two-headed city and county government. 

Other delinquents got PILOTS as tax breaks but are not even paying the reduced amount, so Lenoir has to dun the boards that gave them out in the first place. 

“There are some cracks in the foundation,” he says. 

That’s putting it politely. The donor agencies and biggest delinquents include:

  •  Health, Educational, and Housing Facilities Board (Knightway Apartments, $282,000 and Trezevant Episcopal Home, $369,000)
  •  Industrial Development Board of Memphis and Shelby County (Penn A Kem LLC, a chemical company, $63,000, and Memphis Biofuels, $46,000)
  •  Industrial Development Board of Collierville (Central Woodwork, $285,000)
  •  Center City Commission (Harbor Town Centre, $33,000, and Court Square Centre, $25,000)

The county recoups some revenue by so-called tax sales of delinquent properties. Lenoir has been aggressive on that score, collecting $8 million this year compared to $2.3 million last year. 

One more interesting tidbit: More than 48,000 people have appealed their 2009 appraisals, and another 20,000 are expected to appeal this year. That’s nearly three times the number of appeals of the 2005 reappraisal. 

Depending on how many of them are successful, there could be a reduction in tax collections. Maybe enough to call it news.

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