- (female announcer)
  Production funding for

Behind the Headlines
  is made possible in part by

the WKNO Production Fund,

the WKNO Endowment Fund

and by viewers
  like you, thank you.

- The debate over tax incentives
and economic development

tonight on
Behind the Headlines.

[intense orchestral music]

 

I'm Eric Barnes of
The Daily Memphian.

Thanks for joining us.

I am joined tonight
by Martavius Jones

from the Memphis City Council.

Councilman, thanks
for being here.

- Thank you for having me.

 

- Along with Tami Sawyer, from
the Shelby County Commission.

Commissioner Sawyer,
thank you for being here.

- Thank you so
much for having me.

- Along with Bill Dries,

reporter with,
The Daily Memphian.

We are talking today about
this conversation, this debate

that has been going on as
long as we've been doing

Behind the Headlines
and certainly before that,

about how the County, the City,

the region does tax incentives.

Scheduling note that we taped
this before a joint meeting

of the City Council and
the County Commission

that happened the
day before this airs.

And also last week,

we did a show with Reid
Dulberger from EDGE,

which is the entity
that administers

many of the tax
incentives in town.

As well as Worth Morgan,
a City Councilman

who would like to streamline

and change in probably
a different direction

than I believe the
two guests today.

And that show is available
online at wkno.org.

But I will start with
you Councilman Jones,

 

what are you calling
for in terms of changes

to how PILOTs and other
tax incentives happen?

 

- First Eric I think we
need to have the discussion

and review of the EDGE Board.

EDGE was constituted for
approximately 10 years ago.

And we need to as
the elected officials

that delegated
our responsibility

the County Commission
and the City Council

I think we need to have
a discussion to see

if we're satisfied with
what the results have been,

if there are any adjustments
that are necessary

and how do we move forward?

You know, I look back
at what may have been

the major employment wins

and they seem to
have been short lived

when it comes to the incentive.

The most recent
being ServiceMaster.

But when we talk about
Electrolux and Mitsubishi

some of the ones that received

some of the greatest incentives,

they didn't seem to last long.

So I don't think
that we're getting

and those are just
the high profile ones

the ones that make
the headlines.

I'm of the opinion we're
not getting the results

that were intended.

- And are you calling for,
when you talk about the vote

and the Council to have a
vote on specific projects

that do and don't
get incentives,

or did I misunderstand you?

- Yes and so there's, you know

there are a number
of different factors

when these PILOTs and these
others incentives are being,

when they're being evaluated.

You know, there's one that
generally a cost-benefit ratio.

And so if one has a
cost-benefit ratio less than one

that means that it's costing us

more than it's benefiting us.

And I think that if we're
gonna enter into an arrangement

where we have that
negative cost-benefit,

I think the elected
officials need to know why

and we need to be
the ones approving it

because we're the ones who
are directly accountable

to the taxpayers.

And that's just
one aspect of it.

- Got it.

And Tami Sawyer from
your perspective,

what sort of changes
are you calling for?

 

- There's two major things
that I'm looking at Eric.

First with the tax incentives

that we give as a
County and as a City,

me being a resident of Memphis,

I believe that the
incentives that come through

need to have community
investments attached to them.

Currently, we give this
incentives out willy-nilly

with no requirement to
invest in our schools,

our roads, you know and it
remains a continuous issue.

 

We say that we need to
incentivize businesses

choosing Memphis.

And we blame our workforce.

We say that we don't
have a strong workforce.

Remember up until
three years ago,

our city was marketed as
one of the lowest wage,

 

lowest places to pay
wages in the country.

And so what I would like to
see is incentives redone,

 

repackaged with some
type of community fund

requiring these companies,
the larger ones especially.

 

This is not
necessarily focusing on

small business development
but on the larger companies

to invest in the community,
whether that be childcare,

school systems,
roads, et cetera.

And then second to
Councilman Jones' point.

There needs to be
more oversight.

I actually would love
to use my counterparts

the Republicans
talking points here

where during the COVID crisis

they have continuously
shown chagrin

for the role of the
health department

and said, "We are listening
to non-elected people.

Why are we allowing non-elected
people to make decisions,"

and their attacks on
the health department.

Here we are putting our
largest business decisions

in the hands of EDGE and DMC
who are extremely powerful

 

and the average Memphian
wouldn't even know

what those acronyms
mean and who runs them.

- Yeah and EDGE is the Economic
Development Growth Engine

that again we had the CEO,
President on last week

and they administered
the PILOTs,

the payment in lieu of taxes,
as well as some other grants.

DMC is Downtown
Memphis Commission,

which is probably
one of the biggest,

if not the biggest
incentive giver.

One more question to you
on what you just said

and then we'll go to Bill.

On this notion of
investment so it is the idea

that for a company
to get say a PILOT,

and you know, you're talking
about larger companies,

not small businesses.

That they would
also have to spend,

commit to spending cash on
say, schools or childcare,

that there would be committed
cash outlays on the part

of the company that's
being recruited?

 

- Yes I mean, I haven't
spelled the entire thing out

but I do believe yes, that
that is what's important.

If you're coming here and
you want the talent, right?

ServiceMaster says they
need to go to Atlanta,

their new parent company

"that's where the talent
is," quote unquote.

But you know, we know
that the current statistic

for our schools is
we're graduating

only a third of our students,

prepared for work
or college, right?

And if we have all of
these Fortune 500 companies

and large businesses that
are getting tax incentives

and we're still producing low
education for our students,

they should have some
type of commitment.

If we're not gonna
change our budget

to invest in education,

if we're gonna focus on
business development,

then the businesses
should be required

to invest in our youth.

- And I think the proponents,
and again, I'm sorry Bill.

But the proponents of
these incentives would say,

"Well they are still
paying property taxes

and those property taxes
do go to the schools."

And the second perspective
that they always have

to think into
something like that is

they won't come to Memphis.

They will go to another
city or another state

where they don't have to
make those investments.

Because it's all sort
of the low cost choice

in terms of what
incentives are on the table

because, you know thousands of
entities around the country,

cities, state and region

are doing these
sorts of incentives.

So again, your response to that

and then Bill I
promise I'll go to you.

- Yeah, very quickly
I would just say that

if you look at what's happening

with tax incentives
across the country,

reform is the word of the day.

Boston is reforming
their tax incentives

to be more inclusive
in the community.

Washington, DC required
35% MWBE investment.

That's investment in Minority
and Women-owned Businesses

for the building of
the National Harbor.

That was almost what a
billion dollar development.

And so when we say like, we
can't make these requirements

or people won't come,
how does that work

when we see major
cities making changes

that impact their community?

San Antonio redid
the entire system.

 

You know, Atlanta where
people were going,

has requirements to invest

in Minority-owned businesses
in the communities.

Memphis has low self-esteem
when it comes to these things,

we think we can't
require things,

or people won't come here,

when everywhere else is like

you're not gonna play
my people like that.

New York is requiring
statewide 30% MWBE investment.

And we're still like, "Oh, no."

- Right, Bill go ahead.

- Councilman, let me
ask you about EDGE's

current requirement,

kind of the entry level
requirement on wages

which is $13 an
hour plus employer

subsidized health insurance
or healthcare access.

 

Is $13 an hour with that
stipulation, is that enough?

- No, frankly no.

Just a few council meetings ago,

Mrs. Beverly Robinson, who
is the chair of the Chamber,

provided a presentation to
the Memphis City Council.

And it indicated that for
a single working person

 

with one child,
that the living wage

is closer to $21 an hour.

So I would contend that
we are incentivizing

our continued poverty

if we look at and settle
on $13 an hour as the floor

as far as providing incentives.

I by no means am I saying
that we should do away

with the incentives.

I just think we need
to be more deliberate,

we need to set more direction
of the types of employers

and the types of industries
that we incentivize.

But clearly, $13 an
hour is not enough.

And we shouldn't
be incentivizing.

- Commissioner, what's
your thought on this,

is this all about a
certain wage an hour?

- That's a very important
point absolutely.

 

Thirteen dollars an hour
is not minimum wage anymore.

Fifteen dollars is minimum wage
and we're very close to that

not even being
the talking point.

We're looking at cities
on the West Coast

that are talking
about $20 an hour.

Banks are sending their
minimum wages at $25 an hour.

Bank of America just
announced that by 2025

they'll be at $25 an hour.

And you know, people
wanna make the argument

that these are low talent jobs

and why should they be required?

And anyone who makes
that statement,

I would challenge them to
throw boxes for eight hours

in a crowded warehouse in
the middle of a pandemic

and not have childcare
because you can't afford it

on $7.50 or $12.

- I think both of you
have heard this argument

from Reid Dulberger, the
President and CEO of EDGE.

Who says, "We need to
have a wide range of jobs"

"because if we just go after
the higher paying jobs,

"that we're going
to leave people

in the current labor
market in Memphis out."

Commissioner, what
do you say to that?

 

- You know, I'm doing
better with my language.

So the words that I
would use about that

I'm not going to use Bill.

But I think that it
is a silly argument.

 

It's one of those arguments
that makes it sound

like you're invested in
something when you're not.

I don't think that
by increasing wages,

certain people aren't
going to be included

because there's often a
profit margin that makes room

for these wages.

The reason that
there's a national push

for $15 an hour, Bill

is because the minimum wage

has not been increased
in generations.

People were still earning
$7.50 as minimum wage

when before I was born.

And you know, I'm
estimating here

because I can't
remember the year,

but it's been a
long time. [laughs]

And you know, just
considering that you know,

 

the price of what a dollar
is worth from 1982 to now,

 

a dollar is almost
worth $20 now.

You can't walk into a store

and buy something for
a dollar, pretty much.

And so we haven't changed
minimum wage with,

but we're still requiring
people to live off of the days

when you could get you know,

a loaf of bread and
milk for a dollar.

 

- Councilman, your
thoughts on this.

Should economic
development incentives

be reserved just for new
sectors in the economy

and for the higher paying jobs?

 

- On an incentive
standpoint, yes.

I think that there
will always be

 

a need for lower paying jobs

and they will come to Memphis.

But I just think that the
incentives should be reserved

for those higher wage
industries and companies.

 

- All right, Eric back to you.

 

- Well for both of you,

I'll just stay with you
Martavius, Councilman Jones.

The Mississippi factor
comes up a lot, right?

As does even Fayette
County and Arkansas,

but Mississippi is
probably the number one.

In terms of lower wage jobs,
you know warehouse jobs,

which often are a
little bit more involved

than we probably present them.

But the argument is well if we
don't offer these incentives,

if we go too high
on the minimum wage,

if we go too high
on the requirements,

you can just go
across the border

and still have access to
the airport, to FedEx,

to our neighborhoods, to
downtown, to Beale Street,

to the Grizzlies, the Tigers,

I mean all the sort of
amenities that people sell

and that people
who live here love,

you can take advantage of those
by locating in Mississippi

with far fewer restrictions
and requirements

and what the business
people will say

is a much more
streamlined process.

So it's not just
competing against Boston

and these other cities

that Commissioner
Sawyer has talked about

where they've done reforms.

Mississippi has not done those
reforms as far as I know.

And so people push back on that

what's your response?

 

- This goes back to the comment

that Commissioner Sawyer made,

about Memphis having
a self-esteem problem.

If Memphis feels that it needs
to compete with Mississippi,

 

rural areas, areas
that are not developed,

we have a self-esteem problem.

We have a self-esteem problem

if we think that
that's the case.

From the standpoint
of warehouses,

Memphis does not have hundreds

or even thousands of
parcels of undeveloped land.

That's what you need

for a 3, 4, 500,000
square-foot warehouse.

That's gonna pay jobs that are,

 

that they feel are
competitive at $13 an hour.

So my thing is when we
talk about those jobs

and the salaries that
they demand or command,

 

if we fill that we need
to compete with that

I think that we need
somebody else at the helm

who needs a better outlook
and who's more optimistic

about what Memphis can offer.

And we need to be
competing against cities

like Nashville,
Charlotte, Austin,

not DeSoto County,
not Marshall County,

Fayette or Crittenden County.

- Commissioner Sawyer,
I see you nodding again

are you not worried
about that pushback,

the competition with
Mississippi line that

the business
community often uses?

- No you know, I agree again.

It goes back to the
self-esteem issue.

Who are we as a city,
who are we as a state?

There's a lot of things
that Mississippi does

that you know, are we going to,

do we wanna be 50th in
educating our children,

do we wanna be 50th
in our public health?

You know, do we
wanna have a month

of lack of access to clean
water as Jackson has right now,

instead of two
weeks like we had.

You know, we could go on and on.

But I think that again
these are all arguments

that we're pulling
together to not even try.

The biggest issue here Eric is

the time to have
the conversation

and try to do something
different is now.

To say that someone might
choose to go to Southaven

instead of Memphis.

You know, we've seen people try

but even if you
look at the casinos,

everybody thought that
we were gonna have

this huge you know,
second Las Vegas

and it was still too far
from Memphis to prosper

for a long time.

We are still the
center of the Mid-South

and that means something.

- And again, I should
note that last week

we had Reid Dulberger
from the EDGE

as well as Worth Morgan
from the City Council

who's on the other side of this

you can see that at wkno.org.

Or you can download the podcast

wherever you get your podcasts.

So just to balance things out.

On the issue of schools
and the economy,

 

or excuse me and taxes
and investing in children.

I mean, again the
pushback would be,

I have to play the role
of devil's advocate today

given the way we
structured this.

Would be that the
well, if they are,

if those companies are
moving to DeSoto County,

be they $15 or 13
hour, $10 an hour jobs.

The taxes, the property taxes,

they're going into the
coffers of DeSoto County,

Marshall County, not
into Shelby County,

and so the taxes that pay for
the school system go down,

they aren't, we're
not getting them.

Commissioner your take on that?

 

- Yes that's a possibility.

You know we've had
that happen before,

where companies have decided
not to come to Memphis

and we weren't doing anything.

You know we weren't
requiring anything.

And so I guess, you know
the other side's argument

is if we do something different

they might definitely
choose not to come.

But we've also seen those
companies go to other places

and then close a year later.

And then, you know my last
point there Eric is that,

[throat clearing]

right now we're doing nothing
and still losing companies

and still losing jobs, you know.

So if we're still gonna
have a short lifespan

with these incentives,
if the, you know

companies are
gonna bounce around

and come here for two,
three years and move on.

Then we should get
what we can from them

for those two or three years.

I just think that again,

these are arguments that are
presented to not try anything.

 

- Councilman Jones,
we mentioned ServiceMaster.

And we talked last week
with Reid Dulberger

about ServiceMaster.

That it is, you know
the headline is that,

"ServiceMaster is
moving to Atlanta."

In fact the bulk of the
employees by his count

is still over a 1,000
employees related to Terminix

are still in Memphis.

And so the PILOT
was built around,

I believe around 800, 850,

somewhere in the
800 range of jobs.

 

So the headline says one thing

and that's on us in the media.

But the reality is
that they still have

a major presence here.

Are you worried that, and
those are higher paying jobs.

Those are a more, a broader
more professional jobs.

I mean, there's a tremendous.

It is not the low wage jobs
that we've been focused on here.

 

Are you concerned that
Terminix will move,

and that you know what
happens if they move

or if they want more
incentives to stay?

Those are the high paying
jobs that you talked about.

The ones that we, I think in
your words should be proud of.

How far should we go
as a city, as a community

to keep Terminix in town?

- Well I think that if we're
looking at that prospect

then we have to
respond accordingly.

But going back to my contention,

I think that those,
and I agree with you.

Those are the jobs that we
want to be competitive with.

Now one of the things,
one of the other arguments

that's made and I don't
necessarily agree with it

is we're talking
about our workforce

and what the education
level is here.

If we look at other
competitive cities,

Atlanta, Charlotte,
Austin if you would.

I would contend that everyone
who populates those cities

are not natives.

What I feel that
we need to be doing

and what I strive for us to do,

is make Memphis
attractive to companies

that would want
to relocate here.

One of the things, in this
environment right now,

we look at some high tax states

like New York,
Illinois, California.

So if I had my
druthers about me,

we would have
personnel on the ground

recruiting for Memphis in
those areas to bring them here.

That's what I think that
economic development

and incentive need to look like.

If this required of us

to provide more funding
for us to do so,

I'm in agreement with that.

But I don't think
we're doing a good job

of selling ourselves
as an attractive city.

- All right.

- That's the direction
I think we need to move.

- We'll go to Bill.

 

- Let's talk about the
series of two meetings

that the first one has been
held as we record this.

 

But Commissioner Sawyer
since we can't talk about

what actually happened
at that meeting,

since we're recording today,

what are your expectations
for the meeting,

what specifically do
you want to come out

of these two joint sessions?

 

- So we were able to
make requests in advance.

And one of the
requests that we had

was one that we start
from a baseline.

And you know so everyone has
access to the same information.

And so we reviewed
different reports

and you know we're able to
come into this conversation

 

from a similar standing point.

Even though our
outlook might disagree

 

and be on different sides.

What I hope that
these two meetings

ended up being is
not a waste of time.

You and I have talked
about it before.

I don't want it to
be PowerPoint mania.

I want us to, what I struggle
with as a County Commissioner

is a lot of talking

and not a lot of action
or change happening.

And so what I hope
that these two meetings

come out with is,
either a game plan

for the County Commission
and City Council to say,

"Here's what we agree on,
here's what we think we can do."

You know, whether it be having
a Community Investment Fund,

or agreeing to setting a
minimum wage, whatever it is,

or investing in
recruitment, you know.

Whatever the case may be.

 

Something has to come of it.

Otherwise we just spent
the taxpayer's money

for nice lunch and sodas.

 

- Councilman, your
hopes for these two

very important meetings.

 

- I'll go back to the
fact that this is a,

EDGE is a function that
was created by the prior

or previous City Councils
and County Commissions.

And it will be I'm coming up,

well I'm in the sixth
year of my term.

And so for us to have this
body and for the elected body

 

to not review and determine

what should be the
future direction,

I think it will be a dereliction
of our elected duties

in the trust that citizens
of Memphis and Shelby County

have entrusted us with.

So we have to take a look
back and assess and determine

if or not we are satisfied
with the results.

And the whole
definition of insanity

is continue to do the same thing

but expect different results.

We have to look at that.

I am not satisfied with the
result that we have seen

whether it's from
a wage standpoint,

whether it's from an
industry standpoint.

And I think that I don't want
roll off of the City Council

 

see that going forward,

we're heading in
the same direction

where we've been over
the past 10 years-

 

- Let me, I'm gonna
say, a minute,

I'm sorry Bill to interrupt you

just with a minute left here.

I wanted to take actually
a bit of a left turn

because we have you
both here and you know,

the topic of the day
and still remains COVID.

And as we you referenced
earlier you know

changes in how the
distribution is happening

it does seem that that
distribution is smoother now,

more people are getting
it and obviously supply

from the federal government

and the manufacturers
is increasing.

And there are some
people out there

who are talking on
a national level

about the whole
situation flipping

where demand will be
the problem not supply.

And I guess I'll go
to you first Tami.

I mean, one of the groups
that has vaccine hesitancy,

hesitancy about the
vaccines on a national level

is black communities.

There's much history to that
we don't have enough time

to get into.

But the horrific history of
experimentation on black people

and people of color and poor
people in this country is real

and present in the hesitancy.

What are you hearing
from your constituents

about their eagerness
or their wariness

of getting the vaccine?

 

- Just very quickly.

I think that the hesitancy
has been a bit overstated.

You know, people,
white people in the South

are just as hesitant as
black in the South you know.

- One study was yeah, I
should yeah 40% of Republicans

about nationally don't
wanna get the vaccine

and a big percentage
are hesitant.

Go ahead.
- Thank you.

And so what I'm hearing
from my constituents,

they wanna be
informed, you know.

Some people are waiting to see.

I'm seeing a lot of people

share what their
experiences with the vaccine

and I think people
wanna be healthy.

- Yeah all right.

We're out of time,
I appreciate that.

I appreciate Councilman Jones,

thank you for being here,
Commissioner Sawyer.

That is all the time
we had this week.

Remember you can get
past episodes of the show

at wkno.org, or you can
download the full podcast

of the show wherever
you get your podcasts.

Thanks and we'll
see you next week.

[intense orchestral music]

 

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