Local issues go to state

Mayors ask legislature to be 'honest broker' in school, tax disputes

By Richard Locker for The Commercial Appeal
April 3, 2005

NASHVILLE -- The spartan state Senate hearing room in Nashville was an odd venue for Shelby County Mayor AC Wharton and half a dozen Memphis area Realtors and homebuilders to trade barbs last month over his proposal for a county real-estate transfer tax.

But so was the glass-walled conference room in a nearby office building a couple of weeks later when a frustrated Wharton returned to Nashville and put it bluntly to the Shelby legislative delegation: Pass a bill giving the County Commission authority to enact the transfer tax or accept responsibility for the property tax hike that will result.

The local tax is one of several Memphis and Shelby County issues being fought out in the state Capitol this year instead of their more natural battlefields: the County Commission and City Council chambers in Memphis. Some of the issues affect virtually every Shelby County taxpayer, schoolchild and business but are being played out on a stage 200 miles away.

Other issues include funding sources for city schools, a special status for city and county schools, and an effort to require a referendum before the city could sell Memphis Light, Gas and Water.

The Tennessee Constitution and state statutes enacted over the years are largely responsible for the state legislature's involvement in such minutiae of local governance. But a 1953 constitutional amendment creating "home rule" for cities and a 1978 amendment creating "charter counties" were designed to give local governments more control of local issues. Memphis voters adopted home rule, and Shelby County voters approved a county charter.

Despite both, local officials still find themselves trekking to the Capitol for state action. The Constitution remains restrictive on local taxes, and the amendments granted only limited power, especially to counties.

"The statutes authorizing a county charter provide for limited organizational changes and ordinance powers but do not provide any extension of the authority for home rule in vital areas such as local option taxation," according to the University of Tennessee County Technical Advisory Service.

"We do seem to be getting more and more involved in local government matters than we have in the past," said state Sen. Jim Kyle, D-Memphis. He said local officials may be coming to Nashville for action because the City Council and County Commission are so divided.

"There may be an element of that," said Sen. Mark Norris, R-Collierville, who was on the County Commission before the legislature. "Sometimes they look to the state to be sort of the honest broker and the state can't always do that."

If the legislature authorizes Wharton's transfer tax plan -- up to 37 cents per $100 of property sold -- it will ultimately be decided by the County Commission, which would have to muster a two-thirds vote to enact it.

Wharton asked Shelby legislators to pass the bill so the debate can shift to Memphis, where he said citizens wary of another property tax hike can make their voices heard more effectively.