Wheel tax increase fails at Shelby County Commission

Shelby County Commissioners closed a more than nine-hour meeting Monday without identifying a way to fund debt service for a new Regional One Health campus or two new high schools.

Additionally, they closed the meeting just after midnight without identifying a funding source — other than the county's diminishing fund balance — for about $15 million in items that commissioners have added to the budget ranging from nonprofit grants to tuition reimbursement to an increase in salaries for Sheriff's Office employees.

A proposal to increase the county vehicle registration fee, known as the wheel tax, by $50 failed in two separate votes Monday night.

If it had received the required nine votes, it still would have had to pass a second reading at the next regularly scheduled meeting with at least nine of 13 commissioners voting in favor.

That wheel tax, which so far has been the only plan identified to bring in more than $30 million for debt service to rebuild the region's only level 1 trauma center as well as to build two new high schools, failed earlier Monday night before the issue was revived for a second vote.

The second time, after Commissioner David Bradford moved from a "no" to a "yes," the wheel tax increase fell just one vote short of the nine-vote supermajority required to pass.

Commissioners are left with one scheduled committee meeting and one scheduled commission meeting before the close of the fiscal year. While they could have additional special called meetings, there is limited time to find revenues or cuts to balance the budget.

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Items such as the overall operating and capital budgets were referred back to committee. A proposal to set the property tax at $3.39, the current rate, passed its second of three required readings. If it is amended on the third reading, commissioners will have to suspend their rules to make that the final vote.

Chairman Mickell Lowery said he thinks additional meetings may be required and that a possible wheel tax could return to the table. If no new revenues are identified, there's another option: not doing the Regional One rebuild or the new high schools.

"We could not do those projects which are mentioned, Regional One and the schools, without an additional revenue source," Lowery said. "That would be catastrophic for the county."

Harold Collins, chief administrative officer for the county, also described the situation as dire if commissioners move forward with new capital projects but do not find new revenues: By 2026, the debt service’ fund balance will be an estimated $17 million in the negative, destroying the county's bond rating and leaving it unable to take on new debt.

"Anything other than what we presented to you would severely cripple Shelby County's ability to function," Collins said. "That means to borrow money, to make payroll."

The choices remaining for commissioners are a property tax increase, deep cuts, a combination of the two or finding a creative way to revive and pass a wheel tax increase.

Monday, a series of attempts to make the wheel tax more palatable or to find another means of closing the budget gap were proposed and failed.

Those failures included an attempt by Commissioner Edmund Ford Jr. to use restricted grant funds to pay cash for the two schools, an attempt by Commissioner Mick Wright to cut $45 million from the capital budget and several attempts to add a sunset clause to the wheel tax.

And, the most recent version of the wheel tax increase would have included more relief for residents of Shelby County with incomes under $39,000.

The second time the wheel tax was considered Monday, after Bradford asked for the item to be reopened due to the importance of Regional One, commissioners Bradford, Henri Brooks, Charlie Caswell, Brandon Morrison, Shante Avant, Michael Whaley, Miska Clay Bibbs and Mickell Lowery voted "aye." Commissioners Erika Sugarmon, Amber Mills, Edmund Ford Jr., Mick Wright and Britney Thornton voted "no."

Earlier, Bradford had voted with the contingent opposing the wheel tax increase.

During both discussions, some commissioners spoke passionately in favor of raising the wheel tax to fund needed projects.

Commissioners have long agreed that a new Regional One campus is needed: The neonatal intensive care unit is outdated, the buildings aren't seismically sound and the trauma center is over capacity. The county is also obligated to fund a new high school in Cordova, and a high school in Frayser has long been a desire of Harris and others.

"All of our communities deserve the better education, better quality of life than what we are seeing right now. The only way we’re going to get there from what I’ve seen, because I haven't seen a different plan, is to make the investments into our community," said Commissioner Charlie Caswell during a discussion of the wheel tax. "I'm not looking at it as just raising taxes. I'm looking at it as an investment."

But throughout the budget season, some commissioners have asked for an alternative to fund those projects.

One concern frequently voiced by Commissioner Britney Thornton is that Regional One spends almost no contracting dollars with minority-owned businesses.

Monday, she said she has no faith that a relief program for low-income residents would actually be effective or that Regional One would actually increase its contracts with minority-owned businesses.

"It's a regressive tax," Thornton said. "The rich and the poor are going to pay the same amount."

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As the meeting ended shortly after midnight, Shelby County Mayor Lee Harris said, "Obviously this is not the way to run a legislative branch of government."

"All we can do is be hopeful for this community's sake, for the sake of students in our school system, for the sake of people that need access to healthcare, that sober heads prevail and commissioners live up to the responsibility that they have been given," Harris said.

Harris has spent the weeks leading up to this critical vote bringing in advocates for the capital investments that would be funded with the wheel tax increase, particularly Regional One Health.

In committee last week, patients of Regional One and family members of patients shared information about the life-changing — or life-saving — impact of the area's only level 1 trauma center.

Gia Broadway urged commissioners to approve funding for a new Regional One "however it's done."

She just celebrated what she calls her "third birthday," three years since the employees of Regional One saved her life after a traumatic car crash severed her spine from her brain stem, broke her left arm, both legs, seven ribs and bones throughout her face.

Today, Broadway can walk.

Wednesday, Harris laid out four recommendations to ensure supplier diversity as the new Regional One is constructed, including identifying a cabinet-level executive to oversee diversity hiring goals, creating an online public dashboard and supplier diversity report, prioritizing local hiring with an emphasis on the six zip codes with highest concentrations of poverty and investing in Black-owned firms for the construction of the campus. Those became requirements of Regional One in the new version presented Monday.

"All of us want to see investments in Regional One and all of us want to see investments in our school systems and Frayser and Cordova and Orange Mound and across the entirety of our community," Harris said Monday. "That begs the question of whether we do it this year or whether we kick the can down the road."

Ultimately, several commissioners said their "yes" votes came back to the human impact of Regional One and the schools.

J. Richard Walker III, chair of emergency medicine at University of Tennessee Health Science Center, told commissioners Monday that out of all the hospitals downtown, there are only about 650 active beds for adults. Vanderbilt University Medical Center in Nashville alone has 1,200 beds available.

"If this gets kicked back a year and potentially delayed further on and on, it will affect our ability to provide care for citizens, colleagues, friends, family and others in every district in this city," Walker said.

Katherine Burgess covers government and religion. She can be reached at [email protected] or followed on Twitter @kathsburgess.