October 1, 2012
Last Thursday I participated in a filming of a WKNO program called “Behind the Headlines”. It was led by Eric Barnes, Publisher of the Memphis Daily News. Also participating was Reid Dulberger, new head of EDGE (Economic Development Growth Engine) and two great reporters for the paper, Andy Meek and Bill Dries. The program will be shown at 7 PM on Friday October 5th and will also be available on youtube.
The program was interesting and will be well worth watching. Mr. Dulberger made his case for tax abatements in order to attract more businesses and industry to Memphis and Shelby County. He made the claim that only those who meet the criteria for at least $1.50 return for each dollar of tax abated can qualify.
My questions to him were several.
- In looking over past reports of PILOTS, when companies complete their Pilot period of tax abatement, there is no report of them paying the full amount in the future. He asserted that they do in fact pay the full amount but in my research, I have shown that this is not true. In order for the public to believe in the benefits of the program, someone like the County Trustee needs to publish the facts on each ending Pilot.
- I then questioned the benefit formula and stated that sales tax income for the city has been flat or declining for the last 10 years. Where is the money that is supposedly generated by the Pilot formula?
- Finally I brought up the fact that the County Trustee annual report showed $50 million dollars as the most recent tax abatement amount. However this is only for the County and does not include the City of Memphis tax abatement amount. I asked for the total of the City of Memphis tax abatement amount from the City Treasurer and was sent a report showing $5.2 million dollars. This cannot be true as it has to be at least $25 million or more. Someone is not telling the truth.
Jim Strickland, Memphis City Council member, is investigating this whole Pilot program and hopefully he will get the true facts on the program and whether it is worthwhile or not. I have attached two very well done articles from smartcitymemphis on the Pilot program. One is from 2006 and another from 2012. Their conclusion is similar to mine in that there is very little provable evidence that this program pays for itself. You need to go no further than the sad article yesterday in the Commercial Appeal about the poverty in Memphis to see that things are not improving here in the River City.