Published 6/25/23
Regardless of the systemic oppression of local taxpayers, the rigged Memphis and Shelby County establishment never course corrects. This is shown in the systemic excesses in PILOTs and sluggish economic growth versus Tennessee municipal peers. Tennessee municipal peers is a relevant comparison grouping because state law governs economic development, education and workforce development.
As shown in the chart above, the noticeable 2022 slump in YOY growth vs state municipal peers, should draw attention from local public policymakers. The 2022 Shelby County slump stems from a growing YOY gap in establishment and employment growth versus the other Tennessee municipalities. The 2022 slump YOY variance from average Tennessee municipal total wage growth, can be shown to cost Memphis and Shelby County taxpayers, $23M in one year.
The above data is sourced from the State Comptroller PILOT Report and Bureau of Labor and Statistics Quarterly Census of Employment Wages. The data reveals a data dislocation in excessive parcels under PILOT contracts in Shelby County at 479 versus the three other Tennessee municipal counties at 35, 37 and 55.
If excessive PILOTs worked, total Shelby County wage growth of 49%, since the founding of EDGE in 2011, would be much greater. At the same time, PILOTs promised to support small businesses through Minority Women Business Enterprise (MWBE) programming, but that has not worked with only 26 establishments per 1K population. Versus the other Tennessee municipalities, Shelby County is 6,000 establishments short in having the capacity to power their local economy.
And finally, further irritating Shelby County total wage growth, is low employment growth at 6.1% since 2010. Excessive PILOTs, coupled with low employment growth and an inadequate number of local establishments, will insure structural public budget imbalances, from inadequate public revenue.
Meanwhile, within the context of proposed tax increases and structural budget imbalances, from deficient revenue, there is no discussion in the press concerning Memphis and Shelby County’s public revenue shortfall of approximately $90M. The public revenue shortfall stems from excessive PILOTs of $45M and $45M from the application of the state applied sales ratio, which like PILOTs also directly benefits corporations. Add the $23M from deficient wage growth and the total revenue shortfall approximates $113M.
In the current year, raising taxes is the only solution, while hoping policy steps can be taken toward improving total wage growth and more equitable public revenue reform…..