In light of the proposal to increase the county wheel tax by $20 to create new funding for Memphis Area Transit Authority, we are reposting an October 8, 2013, commentary about the myths surrounding the tax.
Here it is:
Well, it was bound to surface sooner or later. Anytime there’s a debate about new taxes or increasing the sales tax, the Shelby County wheel tax is almost certain to make an appearance.
As usual, almost no one gets the facts straight. It’s hard to tell whether they have situational amnesia that benefits their political position or that they just can’t bring themselves to do the basic research that refutes most of what they are saying.
In a recent discussion on WKNO-TV’s Behind the Headlines between Memphis City Council member Shea Flinn and former Shelby County Schools board member Kenneth Whalum about the referendum to increase the city sales tax to pay for Pre-K and to reduce city property, the hoary head of the wheel tax reared yet again.
This time, it seemed that both sides seemed to accept the mythology about the wheel tax as the basis for their comments. Mr. Flinn said the money was guaranteed for Pre-K if the sales tax is increased. “We didn’t want to get into a wheel tax situation,” he said.
Then, not to be outdone, Mr. Whalum said that the county tax was sold in the 1980s for schools but the money was instead used for road projects. It’s a familiar refrain from some opponents who are fond of saying that the sales tax increase will be a similar bait and switch — although the wheel tax was spent exactly as promised and on the purposes outlined at the time.
Myth 1: The wheel tax was only for schools.
Not even close, the primary purpose of the wheel tax was to create another source of funding for school construction at the time, but it was clearly stated that it was also for the Med and road construction.
Myth 2: The wheel tax was misused and misappropriated.
The bond documents at the time set out the sources and uses for the wheel tax. The precise amounts to be spent for schools, for The Med, and roads were set out for all bond sellers and purchasers to see. We believe that county government would have violated some law or regulation if it had then instead spent it for other uses, and the last time we checked, there was no such legal charge lodged against it.
Myth 3: The public was told that the wheel tax was only for schools.
Simply not true. Shelby County Government didn’t pass the wheel tax in the dead of night in a secret meeting in a darkened room. It passed it in a public meeting of county commissioners that was preceded by several public meetings in which the wheel tax was discussed. Also, for weeks before the vote, Shelby County distributed far and wide brochures that explained the tax, what it would be spent on, and the details about it.
Myth 4: The wheel tax was supposed to be for only one year.
This one is ridiculous on its face. The proceeds from the wheel tax were paying for more than $100 million in bonds for schools, The Med, and roads. It generated about $11-13 million a year in new revenues. The bond documents, the public brochures, and the legislative resolution all pointed out that the funds would be used to pay off bonds for 20 years.
Myth 5: The wheel tax was supposed to end.
At the time that the wheel tax was passed, then-Mayor Bill Morris and a majority of the legislative body agreed that they were only interested in it paying off the bonds being issued at the time. Of course, they were long gone when that day came, and the mayor and Shelby County Board of Commissioners at that time decided to use it for operations and to pay for more school debt, making the point that one board of commissioners cannot obligate another one in the future. There are some who suggest that in this action, county government was taking money away from the school district, however, Shelby County was giving all of its sales tax revenues to schools at the time although it was required to only give them half.
Myth 6: The wheel tax was to pay for air conditioning every city school.
No, it was said by school officials that with the funding, they could pay to air condition schools, but in keeping with state law, Shelby County Government had no ability to direct how the money would be spent.
Myth 7: Only Shelby County had a wheel tax.
Actually, Memphis and every municipality in Shelby County already had a wheel tax when county government passed it, but the municipalities were smart enough to steer clear of that dreaded moniker and apparently the words matter. The earliest wheel tax in Tennessee was enacted in Robertson County in 1947, and by the time Shelby County Government enacted one, the majority of Tennessee counties already had them.
Vote In Favor
Here’s the thing: a vote in favor of Pre-K is in fact a vote in favor of a better future for Memphis.
The attempt to confuse things with myths about the past are merely smokescreens when the big issue is whether it is worth giving every child a fair start in life and if it is worth fighting for our children – and our city’s – future.
The answer seems obvious to us.
