Memphis mayor: De-annexation bill means property tax increase

MEMPHIS, Tenn. (AP) — A state bill that would allow residents to separate themselves from Memphis and four other cities could be “potentially devastating,” Memphis’ mayor said.

The day after the state House of Representatives approved the de-annexation bill (HB779) by a 68-25 vote, Memphis Mayor Jim Strickland told City Council members on Tuesday that Memphis could raise its property tax rate between 30 and 70 cents if the de-annexation occurs, The Commercial Appeal reported (http://bit.ly/22kbEsa).

The bill, which also affects Knoxville, Chattanooga, Kingsport and Marshall County’s Cornersville, is now headed to the Senate floor. It would allow 10 percent of people living in areas that have been annexed since 1998 to break off from their respective cities.

Lawmakers have said they are defending citizens’ rights to vote on the issue. Residents have said their property taxes have gotten significantly higher and they are being forced to pay for services they don’t want to receive.

Strickland’s office released estimates last week that Memphis could lose up to $79 million in property and sales tax revenue if the de-annexation bill passes.

The House sponsor of the bill, Republican Rep. Mike Carter of Ooltewah, has disputed Strickland’s estimates. Carter said that unlike residential property, the city can choose whether or not commercial and industrial property would be annexed as well.

Proponents of de-annexation argue that cities would save money by not needing as many police officers, firefighters and Public Works employees, but Strickland said the savings for Memphis would be scant.

“There might be one police station we would no longer have to maintain, but the savings would be negligible,” he said.

On Tuesday, council attorney Allan Wade said the city should consider its legal options to challenge the bill, should it be approved by the Senate.

“I don’t think due diligence has been done to vet out all of the consequences of the bill,” he said.

Wade declined to elaborate on legal strategies, he said, because he didn’t want legislators to plug the legal holes.

Note: Previous post on the bill’s passage in the House HERE.