Tennessee Taxpayers Association

It Appears That the Various Levels of Our Government May be the Largest Users of Lobbyists in Tennessee 

There are government paid professional lobbyists, governmental association lobbyists, governmental staff members, and elected and appointed officials who are all lobbying our State Government to further governmental interests that are often adverse to the interests of taxpayers. 

Governmental lobbyists, governmental association lobbyists, governmental officials, officers, and employees are ubiquitous in the halls of the Legislature.

Why are they there?  Of course, it is usually all about the money.

Should the various governments be permitted to spend public funds to hire lobbyists to work against taxpayer interests?

NO! !

There is an obvious conflict with the taxpayers and citizens when these lobbyists are used in governmental efforts such as  1) seeking new forms of taxation  2) seeking to increase or expand existing taxes  3) seeking new or increased fees or charges against citizens  4) seeking to obtain hidden tax increases by deleting taxpayers’ rights in the taxing process and in appeals or protests  5) opposing legislation sponsored by individuals and private groups or associations which would promote fairness to taxpayers.

The conflict may even be an unavoidable one when public funds are used to pay lobbyists for any governmental purpose. 

Below is a list of single officials, cities, and counties that hire professional lobbyists.  There are numerous other government agencies and districts such as utility companies and school districts, but we don’t have to list these lobbyists to demonstate the broad use of lobbyists by our governments. 

This information was gathered from the records of the Tennessee Ethics Commission.

In addition to these directly hired lobbyists, often governments and government officials will join together in associations in order to be more effective in influencing the Legislature and/or the Administration.  In this way all the interests of governments and/or the actual officials can be represented by lobbyists.  

The largest local government associations that hire professional lobbyists are:

The County Services  Association is comprised of three other associations;  the Association of County Mayors, the Tennessee County Commissioners Association, and the Tennessee County Highway Officials Association.  

The County Officials Association is composed of County Clerks, State Court Clerks, Registers and Trustees.  

The TN Municipal League is composed of Tennessee cities and towns. 

Some of these same Associations, plus others, also have in-house registered lobbyists. 

There are also other governmental agencies and associations whose officers or directors regularly lobby legislators on behalf of their agencies or associations but have not registered as lobbyists with the Tennessee Ethics Commission.  For example:

This Assessors Association proudly proclaims on their website how well their Director has shepherded important legislation through the Legislature.

Therefore, governments, in one form or another, wield enormous power and influence through the use of lobbyists.

Taxpayers presently do not match the power of these government lobbyists, but collectively they do have the potential to far surpass them.  After all, there are more taxpayers than government officials and taxpayers can collectively afford to counter any efforts by the governments to take and/or waste our funds through direct or hidden agenda tax legislation.

Taxpayer power in government affairs is possible and can be obtained through the efforts of the Tennessee Taxpayers Association.   Join and Support.

       copyright – Tennessee Taxpayers Association – August 16, 2009

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Taxpayers in Memphis & Shelby County Pay Extra $61 million in Taxes to Allow for Appeals.
 

Our original article dated July 2, 2009, Truth in Taxation in Tennessee: It Needs to be Enforced, contained information about the allowance for decreases in assessments and taxes that local governments are permitted to charge taxpayers in the tax rates for estimated tax losses due to taxpayer appeals.

Local governments are required to reduce the tax rate in a reappraisal year to compensate for the value increases the Assessor gives them in increased property values for assessments.  However, there is one loophole.  The governments may add to the reduced tax rate an allowance for estimated tax reductions resulting from appeals of the assessments and taxes.

It was reported in the July article that Shelby County had estimated that over $40 million (actually now over $42.8 million) in County taxes would be lost through appeals.  We pointed out that we thought the estimate was excessive and just another way for a hidden tax rate increase.   

We now have learned that the City of Memphis has provided in its tax rate an extra $18.5 million ($.16 of its tax rate) to allow for anticipated tax losses due to taxpayer protests and appeals.

This means that taken together over $61 million in extra taxes are being collected from Memphis and Shelby taxpayers to allow for tax appeals reduction estimates. 

We do not yet have the Knoxville and Knox County allowance for tax appeal losses, but we do have that information for Nashville and Davidson county. 

Davidson county (USD) has estimated $1.3 million dollars in anticipated tax losses to appeal and Nashville (GSD) has an allowance of slightly over $11.2 million. 

Together, Nashville and Davidson County have estimated tax appeal losses of over $12.5 million and are charging their taxpayers that much more in taxes for 2009 to allow for those expected losses. 

In order to compare these allowances to Memphis and Shelby County, the assessment bases have to be compared. 

Guess what?  The assessment base in Davidson County is almost the same as the Shelby County assessment base.  Davidson County’s total property assessment is approximately $19.6 billion and Shelby County total property assessment is approximately $19.5 billion. 

Why then have Memphis and Shelby County increased their taxpayers’ taxes by over $61 million to allow for expected tax appeal losses while Nashville and Davidson have increased taxes on their taxpayers by only $12.5 million to allow for appeal losses?

Some of the difference is explained in that Nashville and Davidson County’s total tax rate is only $4.13 while the total tax rate for Memphis and Shelby County is $7.2157 or almost 75% more.  

This should not, however,  make Memphis and Shelby County taxpayers feel much better because it shows them that due to the higher tax rate they have to pay 75% more taxes on their homes and other property than Nashville and Davidson County taxpayers. 

If the Nashville and Davidson County appeals allowance is increased by 75% that would be an adjusted equivalent appeals loss allowance of approximately $21.9 million for Memphis and Shelby County, still way short of the extra $61 million charged their taxpayers for anticipated tax losses to appeals.

The message from this information appears to be that Memphis and Shelby County taxpayers may be well overtaxed for the appeals allowance. 

We won’t know for sure until next year and the big question then is, will the governments give any excess back to the taxpayers? 

We think not.

copyright – Tennessee Taxpayers Asssociation – August 6, 2009

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The Constitution May Prevent Split Tax Rates

It appears that for at least the last four years, perhaps more, Shelby County taxed properties located outside of Memphis based on tax rates higher than the tax rates applied on properties located inside Memphis.

For example, in 2008 for homeowners who were located inside Memphis, the County tax rate applied to their assessments was $4.04 per $100 assessment.   Homeowners located outside of Memphis, received a tax rate of  $4.09 per $100 assessment, $.05 per $100 more than City homeowners.   The higher tax rate was, of course, also applied to commercial and industrial properties. 

For 2009, Shelby County has done it again.  For properties inside Memphis City limits the tax rate is $4.02 and for properties located outside the City limits, the tax rate is $4.06, or, $.04 less if located inside Memphis.

Why did Shelby County charge the County taxpayers located outside of Memphis more?

It is generally explained that the higher rate was necessary to retire a bond issue for schools.

We’re not sure that it is fair that County residents must pay on a higher tax rate, but these days in government “fair” doesn’t get much consideration. 

But, there is a larger question looming on this less than “uniform” County tax rate. 

Did Shelby County violate the Tennessee Constitution and State statutes in setting separate tax rates for properties based upon whether they were  located inside or outside Memphis city limits?

According to our legal advisors, the Tennessee Constitution requires uniformity in taxation.  They advise that Article II, Section 28(c), specifically states that with regard to tax rates:

Each respective taxing authority shall apply the same tax rate to all property within its jurisdiction.

This is clear language that raises the question whether the County could have been wrong in applying two different tax rates to its taxpayers based upon location. 

Shelby County is a single taxing authority, yet its tax rate varies within certain districts.   In other words, the same tax rate has not been uniformly applied to all property within the County jurisdiction.

We understand that a suit may be filed to seek County tax refunds and reduced tax bills for properties located outside the City of Memphis. 

Regardless of need for extra revenue, we all should abide by the Constitution and the State Statutes.

copyright – Tennessee Taxpayers Association – August 2, 2009

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