- (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.
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