On Tax Breaks for Corporations
The City of Memphis needs to take care of their responsibilities before investing in more big business. We have first responders, employees, and citizens who are being forgotten and tossed aside while the Mayor and the City Council pass millions of dollar bills to commercial investments. Many of the Memphis companies, which receive PILOT program funding, are in arrears to the City for more than $6 million a piece and many of these companies are also not in compliance with the terms of the program. Why would the City continue to let these companies take advantage of the situation when we could desperately use the funds we are owed?
The PILOT programs are supposed to bring in jobs that wouldn’t otherwise come to Memphis but we are not enforcing that requirement and giving away money to every company at an alarming rate. Similar cities have only five to ten active PILOTs at any given time, compared to the hundreds of active PILOTs in the City of Memphis.
Additionally, in recent decades, elected leaders have invested tax dollars in touristy things to draw those from out of town or for those with higher incomes, but have not invested in those things benefitting the majority of the citizens such as resources for the poor and middle class. The same few wealthy benefit while the poor and middle class struggle for good roads, safe streets in every neighborhood, and the like.
However, if the PILOT is actually bringing in jobs, well-paying jobs, not just minimum wage jobs, are in compliance with the rules and payments, and are not solely concentrated in downtown Memphis, then they definitely can help the city thrive.
To ensure compliance an annual audit should be conducted and all active recipients should be required to participate in some form of community partnership in order to enhance the quality of life for all of our citizens, such as a program for youth called Memphis MentorMe.
For example, a new local startup, Code Crew, found Memphis to have everything we need to be a thriving tech city – if we are willing to teach our youth. The organization empowers kids from underserved communities to be tech innovators through computer science training. Their pilot program, Grizzlies Code Camp, has kids learning app development while hopefully developing a love for tech. My good friend Lauren Turner, another University of Memphis Journalism Graduate Program alum just wrote an article about it for High Ground News.
I’m also against PILOT programs being continuously used as the sole source of investment when there are other options such as another program called Tax Increment Financing (TIF), which is the preferred incentive of Nashville and Knoxville. TIF often gets overlooked here in Memphis, but it’s a great development tool. In fact, the state of Tennessee has authorized its use four times in separate laws.
Since as early as 1989 Nashville began using TIF to capture the increase in property tax revenue created from development and we are all aware of how much and how well Nashville has grown.
TIF can be used to improve whole neighborhoods as well as on specific sites. Many Memphis neighborhoods need help in the form of vacant and blighted property acquisition, public infrastructure improvements, and rehabilitation of existing housing stock to propel it forward, making it safer and simultaneously improving property values.
Don’t get me wrong, TIF is not a replacement for PILOT programs but it’s a powerful development tool that we can use to enhance our blighted urban core. Building this city requires numerous creative solutions and the key is to make sure that we consider each situation with transparency and fairness, but deploy our limited public resources wisely. Then, once we make a decision, we hold the receivers accountable and insist on compliance.