Germantown Voice

You may notice that we changed our name.

The roots of this blog are based on our desire to address issues with persons, including elected officials, who have blocked and excluded many of our Germantown residents from Facebook conversations. Thus the name Blocked In Germantown.

However, as we enter the election season, this blog provides a forum to give a voice to Germantown citizens who have been silenced in Facebook discussions about our City.

Germantown Voice reflects the need for alternative sources of information about the important issues facing our city.

Tax Cuts?

  • Germantown is committed to long term financial stability with five year financial plans not one year budgets.
  • This planning method provides stability in the tax rate for those on fixed incomes, demonstrates ability to service debt to financial markets and allows flexibility in changing economic conditions.
  • At the June 11, 2018 BMA meeting, Alderman Massey made a motion to reduce the property tax rate by $0.11 without collaboration with city staff and no fiscal analysis to support his position. (motion failed 2-3, Massey & Barzizza voting yes)
  • Estimated impact of this cut is $1.8-$1.9 million to the city budget, and there was no recommendation on how to meet those cuts.
  • Disregarding a long-term plan would likely require annual tax increases and also reduce the stability of our finances. Essentially forcing the city to live “paycheck to paycheck.”

Municipal finances are complicated. As I discussed in the piece on school funding, the city is funded by multiple sources. The majority of that funding comes from property tax. In 2017, the Germantown tax rate was $1.97. Now how your bill is calculated is a little more complicated. The county assesses the value of your property and then you pay tax on 25% of that value. So, a $250k house at 25% is $62,500 of assessed value. You then divide that by 100 (the rate is per $100 of value) and multiply by $1.97 for a tax bill of $1,231. For a comparison, commercial properties pay 40% of the value of their property.

Near the end of the June 11, 2018 BMA meeting, Alderman Massey began questioning the City Administrator and Chairman of the FAC about how they came up with the tax rate. This meeting was the second reading of the budget, certainly a proper time to ask questions but probably not the best time to make fundamental changes to the budget that will be in place on July 1 or just 20 days from the meeting. The budget process has been ongoing for months. He has been at some of these meetings. He knows the work the City and FAC are doing to pull a budget together and it appears to have never approached the FAC or city staff with his proposal. What proposal? Alderman Massey made a motion to reduce the property tax rate by $0.11.

Link to YouTube Video of Massey’s remarks

Rightfully, he was questioned about his support for this cut. This is a 5.6% cut to the city’s primary source of funding. Do you have a budget in your household? I hope so. In essence, what Alderman Massey is proposing is to make the city live pay check to pay check. That would likely require annual tax increases and also reduce the stability of our finances. The city budgets for stability. The city administrator clearly states “we don’t do one year budgets we do a five year plan.” Admittedly, I don’t know all of their process but from the City Administrator’s presentation they clearly budget five year capital plans and do high level expense projections to at least that term. The debt projections presented went out to 2048. I can tell you that in corporate finance we look out 5-10 years and sometimes longer.

The city’s commitment to long term financial stability helps on many fronts. The idea is that our tax rates are stable for 5-6 years at a time and some times longer. That stability allowed the city to make it through the great recession without a tax increase. This happens by being able to build up reserves and then draw down on them as time goes on. It works much like your escrow account for taxes and insurance on a house.

The stability this method offers allows people on fixed incomes to budget accordingly and shows the financial markets we are a responsible community and have the ability to service our debts. These funding levels help to dictate the rates we are charged when we borrow money. It also gives the city flexibility to adjust to changing economic conditions as they did in 2008. These are all the reasons Germantown wins awards for their budget processes.

So what support and analysis did Alderman Massey bring for his proposed cut? None, merely a statement that “the ratios, I think, bear out that this will not change our ability to maintain the funding.” Budgets are not built on ratios, they are the product of observations and trends. As I said before, this process has been going on for months. A team of financial professionals from both the City and Financial Advisory Commission (FAC) have worked and reviewed the budget to get to this point. It clearly appears he has not asked anyone on staff to look at this and he has no analysis to support his claims. Alderman Massey has asked for transparency in government and transparency would be evaluating this proposed reduction thoroughly prior to voting on it. I am very concerned that there was no supporting documentation for this proposed cut and two Aldermen (Massey & Barzizza) voted for this not knowing the potential impact.

This is the City of Germantown’s budget ladies and gentlemen. The budget as presented projects property taxes of $32.8 million of property tax revenue. That implies that at the proposed rate of $1.95 (after a $0.02 reduction from 2017 for assessor adjustments) each penny of the tax rate generates $168,000 of revenue for the city. The proposed tax cut would result in a reduction of approximately $1,850,256. The city is required to have a balanced budget. I would like to see where the proposed cuts would come from to meet this type of reduction. Do they come from our ISO Class 1 Fire Department, award winning police department or any of the other great services offered by our city?

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The truth about school funding and sales taxes

It’s budget season again and inevitably we have claims about sales tax and school funding being tied to each other. If that sounds familiar it should, the same claims were made last year.

Everyone who purchases goods in the City of Germantown pays a 9.75% sales tax on those goods. That tax rate is made up of 7% for the State of Tennessee, 2.25% for Shelby County and 0.5% for the City of Germantown. In 2012, we voted to establish our own school district but to do so required that the city contribute funding equal to $0.15 of the property tax rate. This is only the City’s portion of funding. School funding is a mix of Municipal, County, State and Federal funds. To meet this obligation we voted to raise the City’s portion of the sales tax rate from 0.25% to 0.5%. The referendum was worded so that the funds would not to be tied to the schools but would easily meet the requirements for generating the funds the City would be obligated to contribute to GMSD. 

In other places, especially those with small independent school districts, public education is funded by a school tax. While school tax laws vary, typically, the taxing authority lies with the school board that determines the tax rate. Along with that power to levy taxes, the school board bears the responsibility of providing for the needs of the district with school tax revenue. This means the school board must balance their budget based on the revenue they generate from the school tax they levied on taxpayers. And ultimately, the Board of Education must answer to the public politically for the imposed tax rate and stewardship over revenues.

We don’t work that way here. Our school boards do not have the authority to levy a tax. Instead, our public schools are mostly funded by revenue generated primarily from state sales tax and county property tax. Each county in Tennessee is required to operate and contribute funding for a public system of education. In order for a municipality to operate its own separate and independent district, the municipality must provide SUPPLEMENTAL funding. It is up to the municipal governing body to determine the amount and source of supplemental funding within the parameters of state law. So, what are those parameters?

At this point lets stop for a moment to discuss maintenance of effort or MOE.

The term “Maintenance of Effort” (“MOE”) generally refers to a requirement placed upon many federally funded grant programs that the State Education Agency (SEA) and Local Education Agencies (LEAs) or school districts, demonstrate that the level of State and local funding remains constant from year to year.(1)

Ask the City of Memphis about this. They famously tried to cut funding from Memphis City Schools and ran into issues with MOE. So what does MOE have to do with the sales tax? Great question! Sales taxes are elastic, meaning that they fluctuate based on economic conditions. More simply, it fluctuates based on how much you and I shop in Germantown. Had we tied the sales tax to the schools, MOE would require that every time we break a record in sales tax collections, we would then have to meet that funding level going forward (even if we hit a recession and collet fewer taxes). You can always go up but never down, it is a one way street with MOE.

The administrators who crafted the wording of the resolution understood this and thus worded the referendum accordingly. It allowed the new sales tax rate to fund our obligations without escalating due to economic ups and downs. This is fiscally smart because when sales tax revenues drop the only other source to pay that obligation is your property taxes. In a recession not only would you have the negative impact of a down economy, the city would be in a position to be forced to raise your property taxes to meet the MOE requirements.

This is why the fiscal policy of tying school funding to a variable revenue source is dangerous. That policy reduces the predictability of property tax rates for people on fixed incomes. One year you are fine and the next we have a tax hike to offset sales tax shortages. 

See the CA article below to read how Aldermen Barzizza and Massey raised the same issues last year…

Despite public view, sales tax hike was never intended solely for suburban school systems

Bonus – Why Sales Tax vs. Property?

Sales tax is a burden shared by everyone purchasing goods in Germantown. It allowed the City to meet the revenue generation needs with out over burdening home owners. It spread that revenue generation across the broader community. You come from out of town and spend money in Germantown? You help fund our schools. And we thank you!

Reference

(1)   Maintenance of Effort: The Basics 

Civics 101: GMSD, “City Hall” and non-profits.

I saw the following post recently, and wanted to respond with more questions:IMG_8270

My questions:

1.  Why would an Alderman want to get information about Germantown schools (specifically about teachers who have resigned, as shown in a follow up comment)?

2. Why would this Alderman, an elected City Hall official, think he could get this information from City Hall?

But I couldn’t pose these questions in response because I’m . . . you guessed it . .. well, not technically “blocked,” but “muted” on this public page, meaning I can see posts but cannot comment on them. We started this blog to give a voice to those who are blocked (and muted), so I’m going to use that voice.

Does Alderman Massey know that City Hall and GMSD are separate entities? That other than approving a budget, City Hall has no oversight over GMSD?

This prompted me to look back at something I recalled from a Board of Mayor and Alderman (“BMA”) meeting earlier this year.

On February 12, 2018,  a $100,000 allocation to the Germantown Education Foundation (a separate, private 501(c)(3) charitable organization), was up for a vote by the BMA. Alderman Massey did not want to allocate the money to GEF and instead suggested that it would be better just to allocate it directly to the schools, cutting out the “middleman.” Putting aside several other problems with this (such as that the allocation to GEF helps support an organization that is very good at fundraising and every dollar allocated to GEF likely results in many more dollars raised for our schools),  it quickly became apparent that Alderman Massey did not understand the concept of Maintenance of Effort.  It is not unreasonable for an ordinary citizen to not understand this concept, but he is an elected official and this concept has serious implications for the city’s finances.  In short,  every operational dollar allocated directly from the city to the school system is considered Maintenance of Effort and must be added to all future operational fund allocations to the school system. So, an allocation of $100,000 to the school system in 2018 results in mandated additional allocations of $100,000 in 2019, 2020, and so on. This was mentioned a few times but did not seem to sink in.

In that same meeting, Alderman (and now Mayoral Candidate) John Barzizza suggested that it would be prudent to have the Germantown Education Commission* have direct oversight over GEF.  The city attorney pointed out that GEF is an independent Non-Profit, and as such, is required to provide financial information to the public.  Alderman Barzizza again suggested having a city Commission provide direct oversight over an independent 501(c)(3) entity.  That would be like saying the city should have it’s wellness commission oversee the Board of Directors of St. Jude or LeBonheur if it is going to donate any funds to those charities.

Does Alderman Massey think that GMSD is governed by City Hall?  That it is within his role as city Alderman to request and obtain personnel records from GMSD?  That City Hall maintains such records for a wholly separate government entity (GMSD)?  That even if there were something untoward found in such records, it would be the role of the BMA to address it as opposed to the GMSD Superintendent or School Board?

Does Alderman Barzizza think that GEF, a private charitable organization, is a city agency?  Does he think the city can exercise direct oversight over the board of an independent Non-Profit charitable organization?

*full disclosure:  I am a member of the Germantown Education Commission, which is an advisory commission, having no oversight over any school, school district, or independent education non-profit.

Our Purpose

 

Just to be clear, this blog was created to give a voice to those silenced by the actions of Alderman Dean Massey when he blocked a large number of citizens from the ability to converse with him on community pages like the Germantown Bulletin Board. It appears Alderman Massey has been removed from that page for rules violations.

While that is unfortunate, in a recent post on Massey for Germantown regarding his removal, he states that this blog is an attempt to smear him. A review of our posts should be clear that we have only answered statements by Alderman Massey with facts, never have we smeared him.

Alderman Massey also repeats that anyone who responds to his statements with facts are puppets of the Germantown Administration. He accuses us of trying to control the narrative. Unfortunately, Alderman Massey is unable to see that by blocking us, HE is controlling the narrative.

In no way do we intend to smear him or any of his supporters. Our only purpose is to provide a forum to freely answer his statements.

As I have stated publicly before, I have no interest in Alderman Massey’s personal family pictures on his personal page. My problem with being blocked is only with being shut out of the conversation he holds with his constituents. Additionally, by blocking all dissent, he gives the appearance that no one disagrees with his positions which is misleading.

Perhaps he now understands just a bit how all of us feel, being removed from the community conversation, at least in that one social media venue.

 

Love and Light

Just a few days ago, on April 4, 2018, we commemorated the 50th Anniversary of the assassination of Dr. Martin Luther King, Jr. His words are as relevant today as when he spoke them:

“Darkness cannot drive out darkness; only light can do that. Hate cannot drive out hate; only love can do that.”

I’ve been filled with anger too much lately, about a number of things, but in large part about the relentless attacks I see on social media against my city, its leaders and many citizens.

I find myself angry when I see people who have shared facts or opinions, or dared to say they like something that the majority in a given echo chamber hate, get instantly bombarded with ugly personal attacks.

I was very angry earlier today when Mr. Massey once again posted a citizen email that raised concerns and, in his forum where only those who support him are allowed to comment, made himself out to be a victim and cast aspersions on that citizen, city leaders and law enforcement. And then when one of his chief supporters and the administrator of his page actually referred to our city as “Nazi Germany” and “the Reich”. 😳. Really? I privately let this person know how deeply offensive that comparison is to me and others affected by the Holocaust, and in return I was called a “narcissist” and told to “go away.”

I could go on, and it is tempting, but I won’t, because Dr. King was right. Only love can combat hate. So here goes:

I love my city. Is it perfect? Of course not. But…

I love the parks.

I love the schools.

I love that my city signed a resolution and the nationwide Mayor’s Compact against hate and bigotry in the wake of the neo-Nazi/KKK rally in Charlottesville that turned deadly.

I love the new coffee place and my little knitting group that meets there.

I love the greenway, and seeing so many friendly faces out running and walking dogs on sunny days.

I love the trees. Yes. There are sooooo many trees, a fact which I am reminded of every pollen season.

I love our amazing police and fire departments, and the fact that I feel safe walking at night in my neighborhood.

I love our library.

I love GPAC, and GAC.

I’m not afraid to say that I actually like the look of the new developments at Thornwood and Travure, and places like them and Whole Foods, that are set close to the street (though I would be called unspeakable things for saying that in certain Facebook groups). I think they look modern and clean and better than a large parking lot.

I don’t love – but also don’t hate – new apartments. They’re apartments. They don’t really inspire love or hate -or fear- in me.

I don’t love that our elementary and middle schools are overcrowded; but I do love that so many people want to join us here and that our schools and city are addressing the growth.

I love that this is a place where I, someone who didn’t really know anyone here when I moved here, and who, as a politically left of center Jew who doesn’t particularly like barbecue, doesn’t really fit in, was welcomed when I started to get involved in my kids’ schools, and later as a volunteer on a city commission.

I love our Apple Store, and that they have a helpful young “genius” there who wears a kilt. ☺

I love that we are finally getting a Trader Joe’s – YAY.

I love my friends.

I refuse to let darkness and hate win in Germantown.

Let’s drive away the anger, darkness and hate with neighborliness, light and love.