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This is a 
production of WKNO Memphis.

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Production funding for 
"Behind the Headlines"

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is made possible 
in part by...

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Shelby County Mayor 
Mark Luttrell

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tonight on 
"Behind the Headlines."

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♪ Theme Music ♪

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♪♪♪

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I'm Eric Barnes,

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publisher of the 
Memphis Daily News.

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Thanks for 
joining us.

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We are joined 
tonight by

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Shelby County Mayor 
Mark Luttrell.

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Thank you for coming back.

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Thank you Eric.

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And Bill Dries, Senior Reporter 
of the Memphis Daily News.

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We'll start with 
a conversation.

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Maybe it's almost 
a national debate,

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it's obviously a local and 
state-wide conversation

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about the health of cities, 
the health of counties,

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the health of 
state governments,

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federal governments.

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Talking about it, a lot of 
it's about taxing and spending.

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It's a lot about debt level.

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I think probably 
over the last few years

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coming out of the recession 
and the financial crisis

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people have been, 
at least if not educated,

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told about debt 
levels and pension

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and all that more than 
in many, many years.

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From the Shelby 
County point of view,

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what is the financial health, 
big picture small picture,

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of Shelby County?

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Well, Eric, I'm 
pleased to say

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that Shelby County government

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is pretty fiscally sound.

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Our bond rating is 
still double A-plus,

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where it's been 
for quite a while.

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We are paying our 
debt down progressively.

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Our debt about four years ago 
was sitting at 1.8 billion,

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it's now at about 1.4 billion.

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It'll be under 1.4 by the 
end of this fiscal year.

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So we're progressively 
paying our debt down.

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Most of our debt is 
attributed, in fact

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1.1 of that 1.4. 
billion is attributed

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to school construction 
over the years.

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But we're progressively 
paying that debt down.

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We're living within our means.

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Our pension funding is being 
fully funded on an annual basis.

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We've taken some hits from the 
market the last few years but

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we're rebounding from that 
and we're sitting at

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about 88% funded 
at this point.

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Bill, I think I told you 
the other day 82%

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so I need to 
correct that.

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But we're sitting at about 88% 
and continuing to pay that down.

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So we are 
financially in good shape.

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We're living within our budget 
which we're required to do

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and I'm pleased 
with where we are.

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We're starting to 
see some indications

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of a turn in 
the economy.

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We're still facing across Shelby 
County which certainly impacts

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the financial 
welfare of the county.

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We're still facing higher 
than normal unemployment.

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A number of people 
below the poverty line

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is still a 
concern to us,

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which are things 
that impact the budget.

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But from a standpoint of our 
financial stability

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in county government 
we're in good shape.

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We haven't gotten any 
letters from the comptroller.

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[laughing]

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We'll get to that.

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You touched on a couple things.

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I want to come back to 
one thing that you said,

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real quickly.

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The county debt 
is at 1.4 billion,

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it'll be under a billion 
by the end of this--

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No, the under 1.4 billion.

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It'll be under 1.4.

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By the end of this fiscal year.

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The County was able...

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I think we had a couple of 
County Commissioners on

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in the last few months,

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talked about 
having refinanced

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and managed 
the debt well

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in a historically low 
interest rate environment.

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The county was 
able to refinance,

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I guess you would 
say, responsibly.

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Yes.

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Well, we're constantly looking 
for ways to refinance debt.

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That's not a 
uncommon occurrence.

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You'll see that take place 
sometimes as often as annually

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as those opportunities 
present themselves.

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You talked about 
the pension being

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88, 86% funded.

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What about health benefits?

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I mean, for retired workers and 
then when you look out that's

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another one that gets a lot 
of attention with cities and

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state-level, federal-level--

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Certainly the cost of health

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care benefits is 
increasing annually.

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Our benefits are 
increasing annually.

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We have got to, as a 
county government,

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look very hard at 
those areas and we are.

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Last year, Eric, we conducted a 
rather thorough efficiency study

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of county government and 
projecting out in the years

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ahead and we're following some 
of the recommendations that have

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been made that are focusing 
on the health benefits plan.

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There's some adjustments to our 
health benefits plan this year.

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There'll be some other 
adjustments moving forward as we

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see opportunities to really 
move the needle in that area.

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Same with our pension fund.

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Our benefits package 
is extremely expensive.

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Right now it's 
about 42% of salary.

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My church is about 
15% of salary

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so that gives you a little 
bit of comparison.

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We have got to, we've got to 
take into consideration

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that going forward 
there'll have to be some 
adjustments

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made to keep us in that 
sound financial condition

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that we're in.

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Bill.

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You talked about 
this earlier, Mayor,

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about the switch to 
defined contributions.

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How do you see that unfolding?

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That particular decision?

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Well, as I think you're aware, 
we really can't make any changes

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to our system that 
affect current employees.

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There's some minor 
adjustments that can be made

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but our current employees, we 
have a contract with them.

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I think it's 
solid as a contract.

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So the changes that we make 
will be really going forward

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with future employment.

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And we're certainly looking at a 
array of different approaches

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to the contribution 
scheme

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and I think we're 
going to have to

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bring county 
government in line

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with more what's taking 
place in the private sector.

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To go into a little 
bit of background,

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at one time county government 
salaries were considered

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to be rather low and county 
government compensated

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by having a generous 
benefits package.

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Well over the years we've 
seen our salary come up

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to a very 
competitive level

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but we kept our benefits 
package at a high level.

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So it's a little bit out 
of balance with reality.

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So we're going to have to 
adjust our benefits package

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so that we're not 
consuming 42%.

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And this, you know, 
for folks listening,

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I mean, you know, 
pensions, defined benefit.

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It's not the sexiest issue but 
those are the issues

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that were critical 
to sinking Detroit.

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The state of Illinois 
is in huge trouble.

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I read a thing recently, 
the military benefits,

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health care, pensions, to 
military folks is skyrocketing

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and the military is very 
worried about how they're 
going to actually,

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you know, bullets 
and ships and planes

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when they're spending so 
much on benefits.

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And, again, it goes back to 
that same thing you describe.

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Historically, public sector 
jobs were low paid

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so they had 
high benefits.

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Now it's relatively high paid...

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Not really high paid 
but relatively high pay,

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relatively high benefits.

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So it's a sea change nationally.

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It's the very foundation 
of the problems

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that you're seeing in 
municipal government.

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I worked for the Federal 
Government several years ago,

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back in the '70s and '80s and 
federal government back then

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started making some adjustments 
to the benefits packages.

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It has served them well.

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But the reality of it is 
that if we're going

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to stay solid 
and solvent

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we're going to have 
to make some adjustments

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going forward.

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Also on the issue 
of funding, I mean,

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there's a sea change in the 
funding of education

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that's been going 
on and evolving

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and we've talked 
a lot about the schools

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on this show, the papers.

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You've obviously been right 
in the middle of all that.

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I had someone who is very 
close to these issues

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who we were talking 
about having you on

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and talking about the fact 
that county government

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will now be the source 
of funding not just

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for all the schools 
within the county

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including the municipal 
school districts.

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And I said wait,

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I thought they had separate 
school districts out there.

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I thought they raised 
their taxes out there.

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I thought they were funding 
their own schools

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in Germantown 
and Collierville

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but the funding still runs 
through county government.

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It is and everybody who 
pays a property tax

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is paying for education 
in Shelby County.

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Out of our property tax of four 
dollars and whatever 38 cents

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about $1.91 of it 
goes to education.

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And every property owner 
in Shelby County

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if you live in Bartlett or 
Memphis or Collierville,

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you're paying that.

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So, we have an obligation 
to all the school systems.

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Now, granted, the municipal 
school districts also

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have a huge 
responsibility.

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Funding for education comes 
through a multitude of sources.

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It comes through 
some federal sources,

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state sources, city, county.

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The school budget, the 
total school budget,

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is in excess of $1 billion.

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The County's contribution 
to that is $382 million.

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So you can see that 
there's a lot of money

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coming from a lot of 
different directions

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to fill that balance 
between 382 and 1.4.

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But that county, for the county 
that 382 is the biggest number.

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It's the biggest single number.

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And that 382 goes from 
everywhere

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from Collierville to what will 
be the Legacy County School 
System

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which is mostly the 
Memphis schools, all that.

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The money will be distributed 
across the County Schools,

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the Municipal Schools 
and the County Schools,

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based on the ADA,

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average daily 
attendance, formula.

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How many students you 
have in your school today,

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you get X-number of 
dollars per student.

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So, as you have noticed 
in the news last few days,

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there was a great deal of 
competition that's taking place

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now among the 
schools to get students.

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So it's going to be 
interesting to see over 
the next few months

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how this kinda levels out 
among the municipalities.

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And then, about the 
first of the school year,

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we'll start making payments 
to those schools systems

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based upon their average 
daily attendance.

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Next August--

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Actually this year,

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in August.

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And also this brings up kinda 
the balance that you have

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to strike in making the budget 
proposal when you get some idea

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of how much this is going to 
cost each of these suburban

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municipalities for their school 
system because it will involve

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some mix of county funding 
on the formula you mentioned,

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the ADA formula.

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But there will also be 
some money from those

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local governments, from 
Lakeland and Arlington.

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Absolutely.

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Money from the 
local governments.

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Governments have 
some latitude there

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but certainly their sales tax 
goes to education as well.

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So property tax 
goes to education,

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sales tax goes to education.

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All of the municipalities last 
year voted to increase

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their sales tax in 
their communities

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and it's my understanding 
that their intent was

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to devote 100% of 
that to education.

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But they have some 
latitude there

250
00:10:26,931 --> 00:10:28,131
so within the municipalities

251
00:10:28,131 --> 00:10:31,031
they're going to be funding 
education with sales tax

252
00:10:31,031 --> 00:10:33,264
and with property tax 
from their residence

253
00:10:33,264 --> 00:10:34,898
and then property 
tax revenue

254
00:10:34,898 --> 00:10:37,131
that comes from the 
county property tax

255
00:10:37,131 --> 00:10:38,398
as well.

256
00:10:38,398 --> 00:10:40,764
And then, of course, what 
you get through the

257
00:10:40,764 --> 00:10:45,764
state BEP formula and 
then federal grants.

258
00:10:45,764 --> 00:10:48,631
So it's a lot of money coming 
from different directions.

259
00:10:48,631 --> 00:10:53,598
Do you anticipate at this early 
stage in the discussions

260
00:10:53,598 --> 00:10:55,864
that those suburban 
school systems

261
00:10:55,864 --> 00:10:57,298
are going 
to come to you

262
00:10:57,298 --> 00:10:59,831
or to their respective 
governments

263
00:10:59,831 --> 00:11:01,564
for the 
startup cost?

264
00:11:01,564 --> 00:11:04,064
Well, we've had 
some discussions

265
00:11:04,064 --> 00:11:06,198
with the municipalities 
about that.

266
00:11:06,198 --> 00:11:09,464
We'll continue to have some 
discussion about it but we don't

267
00:11:09,464 --> 00:11:12,131
have a lot of flexibility 
in county government

268
00:11:12,131 --> 00:11:13,764
for advancing money.

269
00:11:13,764 --> 00:11:18,764
We're on a pretty tight 
schedule ourselves

270
00:11:18,764 --> 00:11:20,764
based upon when the 
revenue starts coming in

271
00:11:20,764 --> 00:11:22,031
from the property tax.

272
00:11:22,031 --> 00:11:24,964
We're going to look on where 
we can help the municipalities.

273
00:11:24,964 --> 00:11:27,031
It's been my objective 
from the very beginning

274
00:11:27,031 --> 00:11:30,231
that it our responsibility 
in county government

275
00:11:30,231 --> 00:11:32,664
to see what we 
can do to help.

276
00:11:32,664 --> 00:11:33,698
What are those startup costs?

277
00:11:33,698 --> 00:11:35,698
I mean, is that like they've 
hired superintendents

278
00:11:35,698 --> 00:11:38,098
and they've got some 
planning that's got to happen?

279
00:11:38,098 --> 00:11:40,831
Many of these funding 
sources won't start hitting

280
00:11:40,831 --> 00:11:42,998
the municipalities 
until this summer

281
00:11:42,998 --> 00:11:44,998
but yet they're 
wrapping up now.

282
00:11:44,998 --> 00:11:47,364
They want to start 
signing contracts for teachers,

283
00:11:47,364 --> 00:11:49,931
they've gotta start 
ordering supplies.

284
00:11:49,931 --> 00:11:51,031
The nuts and bolts.

285
00:11:51,031 --> 00:11:56,698
A great deal of that that's got 
to happen between now and July.

286
00:11:56,698 --> 00:11:59,064
You think about it, 
they've got, really,

287
00:11:59,064 --> 00:12:02,064
the municipality's got 
about six months to ramp up

288
00:12:02,064 --> 00:12:03,064
and be ready to go.

289
00:12:03,064 --> 00:12:05,064
They've got to be ready to go 
by about the first of July,

290
00:12:05,064 --> 00:12:06,064
really.

291
00:12:06,064 --> 00:12:08,064
You think all of 
them will be ready?

292
00:12:08,064 --> 00:12:09,064
I'll put you on the spot.

293
00:12:09,064 --> 00:12:10,064
Well I hope they are.

294
00:12:10,064 --> 00:12:12,064
We're going to certainly 
work with those

295
00:12:12,064 --> 00:12:14,064
that may be struggling 
a little bit.

296
00:12:14,064 --> 00:12:17,498
So, it's my objective to help 
them in any way that we can

297
00:12:17,498 --> 00:12:19,531
in county government 
to hit that deadline.

298
00:12:19,531 --> 00:12:23,031
I've asked a lot of people this, 
as we've gotten the shape

299
00:12:23,031 --> 00:12:25,331
of the future school 
systems in Shelby County,

300
00:12:25,331 --> 00:12:27,331
I mean there's so 
much uncertainty

301
00:12:27,331 --> 00:12:28,564
for what two, three years?

302
00:12:28,564 --> 00:12:30,598
We now have this 
kind of re--

303
00:12:30,598 --> 00:12:31,598
We consolidated.

304
00:12:31,598 --> 00:12:33,598
Now we're deconsolidating 
into a very different shape

305
00:12:33,598 --> 00:12:34,964
then we were 
in before.

306
00:12:34,964 --> 00:12:36,964
Separate school 
systems in the suburbs,

307
00:12:36,964 --> 00:12:38,964
a really a 
reshaped, in many ways,

308
00:12:38,964 --> 00:12:40,098
County School 
System that--

309
00:12:40,098 --> 00:12:41,098
- A sea change.

310
00:12:41,098 --> 00:12:42,198
It's a sea change.

311
00:12:42,198 --> 00:12:44,564
And then all so much education 
reform going nationally,

312
00:12:44,564 --> 00:12:47,498
going on from the 
state level and so on.

313
00:12:47,498 --> 00:12:50,864
Are you happy, you're one of 
the few people who sits over,

314
00:12:50,864 --> 00:12:52,431
you know, the whole of this.

315
00:12:52,431 --> 00:12:54,431
You are, as we were 
talking about before the show,

316
00:12:54,431 --> 00:12:55,464
people sometimes forget

317
00:12:55,464 --> 00:12:57,498
that you're not just 
mayor of the suburbs,

318
00:12:57,498 --> 00:12:59,464
you're Mayor of Shelby County 
including Memphis,

319
00:12:59,464 --> 00:13:01,531
including 
Collierville, Millington,

320
00:13:01,531 --> 00:13:03,098
everything.

321
00:13:03,098 --> 00:13:05,498
Are you happy with the way 
that this all shook out?

322
00:13:05,498 --> 00:13:08,364
That the shape of the 
school system is right,

323
00:13:08,364 --> 00:13:09,831
appropriate?

324
00:13:09,831 --> 00:13:11,764
I think, 
relatively speaking Eric,

325
00:13:11,764 --> 00:13:14,531
when you look at the 
chaos and confusion

326
00:13:14,531 --> 00:13:16,198
that we were 
facing two years ago

327
00:13:16,198 --> 00:13:17,731
and see where 
we are today

328
00:13:17,731 --> 00:13:19,731
it's somewhat 
amazing.

329
00:13:19,731 --> 00:13:21,464
We took two large systems

330
00:13:21,464 --> 00:13:22,864
and made a 
larger system

331
00:13:22,864 --> 00:13:25,498
which is contrary to 
conventional wisdom

332
00:13:25,498 --> 00:13:26,664
and then from the 
larger system

333
00:13:26,664 --> 00:13:29,098
you're breaking it up into 
six smaller systems

334
00:13:29,098 --> 00:13:31,764
where, again, that 
transition is taking place.

335
00:13:31,764 --> 00:13:34,298
So we're still very 
much in transition.

336
00:13:34,298 --> 00:13:37,464
I am pleased to see that we're 
getting this whole discussion

337
00:13:37,464 --> 00:13:39,464
kind of out of the 
political arena

338
00:13:39,464 --> 00:13:41,464
and we're getting 
it into the hands

339
00:13:41,464 --> 00:13:43,464
of the professionals 
in education.

340
00:13:43,464 --> 00:13:45,798
I've been pleased with the 
selections that I've seen for

341
00:13:45,798 --> 00:13:47,798
the superintendents 
and the municipalities.

342
00:13:47,798 --> 00:13:51,698
I have talked to a number of the 
municipalities and there seems

343
00:13:51,698 --> 00:13:53,798
to be a good working 
relationship

344
00:13:53,798 --> 00:13:54,831
that's moving forward

345
00:13:54,831 --> 00:13:58,331
so, relatively speaking, 
we're in a heck of a lot

346
00:13:58,331 --> 00:14:00,764
better shape than we 
could have been.

347
00:14:00,764 --> 00:14:03,564
Do you see there being 
coordination work between

348
00:14:03,564 --> 00:14:05,664
the County School 
System, Dorsey Hopson,

349
00:14:05,664 --> 00:14:07,731
again the legacy, I don't 
know...

350
00:14:07,731 --> 00:14:10,164
people call it the 
City School System

351
00:14:10,164 --> 00:14:11,931
it's the County 
School System

352
00:14:11,931 --> 00:14:13,998
and some of the 
suburban schools?

353
00:14:13,998 --> 00:14:17,164
I've been very pleased 
with what I have seen

354
00:14:17,164 --> 00:14:19,598
with Superintendent Hopson 
and his school board.

355
00:14:19,598 --> 00:14:23,064
They seem to be, once again, 
professionals that are looking

356
00:14:23,064 --> 00:14:26,198
at this issue and every 
indication seem to be

357
00:14:26,198 --> 00:14:28,298
that they're working 
with the municipalities

358
00:14:28,298 --> 00:14:29,031
and I'm seeing 
that as well.

359
00:14:29,031 --> 00:14:31,031
So, the professionals know 
what they've got to do

360
00:14:31,031 --> 00:14:32,931
and they know the challenge 
that's ahead of them.

361
00:14:32,931 --> 00:14:34,898
So we're moving in 
the right direction.

362
00:14:34,898 --> 00:14:36,731
Goodness, it's still 
going to be a tough slog.

363
00:14:36,731 --> 00:14:38,898
I think this transition's going 
to take a few years

364
00:14:38,898 --> 00:14:41,031
before we really 
get settled.

365
00:14:41,031 --> 00:14:42,831
You talked to 
Hamilton County.

366
00:14:42,831 --> 00:14:45,098
They did it ten years ago and 
they're still transitioning.

367
00:14:45,098 --> 00:14:47,264
Charlotte Mecklenburg's 
still transitioning,

368
00:14:47,264 --> 00:14:48,598
Davidson County.

369
00:14:48,598 --> 00:14:50,864
So there's still some 
struggles ahead of us

370
00:14:50,864 --> 00:14:54,564
but relatively speaking we're 
in pretty good shape.

371
00:14:54,564 --> 00:14:55,498
Bill.

372
00:14:55,498 --> 00:14:57,498
Let's switch gears here

373
00:14:57,498 --> 00:15:00,431
and talk about the 
tourism development zone

374
00:15:00,431 --> 00:15:02,364
that the city wants.

375
00:15:02,364 --> 00:15:06,464
That the City of Memphis 
wants to finance

376
00:15:06,464 --> 00:15:09,731
fairgrounds 
redevelopment.

377
00:15:09,731 --> 00:15:13,264
It seems as if we have a 
difference of opinion there

378
00:15:13,264 --> 00:15:15,698
about whether harnessing 
the sales tax revenue,

379
00:15:15,698 --> 00:15:20,031
incremental sales tax revenue, 
from that zone would affect

380
00:15:20,031 --> 00:15:23,898
education, public education 
funding in Shelby County or not.

381
00:15:23,898 --> 00:15:28,531
The city seems to be saying 
that it will not affect that.

382
00:15:28,531 --> 00:15:31,364
What is your belief 
about how that works?

383
00:15:31,364 --> 00:15:35,464
Well, first of all, this is 
where county government

384
00:15:35,464 --> 00:15:37,464
and city government 
have gotta be very careful

385
00:15:37,464 --> 00:15:40,364
that we don't step on 
each other's toes.

386
00:15:40,364 --> 00:15:42,998
What Memphis hopes to 
do with that property

387
00:15:42,998 --> 00:15:44,764
is really a 
Memphis decision.

388
00:15:44,764 --> 00:15:47,898
Where the county has an 
interest is sales tax

389
00:15:47,898 --> 00:15:49,964
and as we talked 
about earlier

390
00:15:49,964 --> 00:15:54,598
there's a portion of sales 
tax that goes to education.

391
00:15:54,598 --> 00:15:58,331
I want to ensure that 
education in no way is going

392
00:15:58,331 --> 00:16:01,931
to be adversely impacted 
financially by this decision.

393
00:16:01,931 --> 00:16:04,364
And there are 
differing opinions about that.

394
00:16:04,364 --> 00:16:09,864
In fact, I've got a meeting 
today with Robert Lipscomb,

395
00:16:09,864 --> 00:16:12,064
the city and several 
people from the city

396
00:16:12,064 --> 00:16:14,064
and several folks 
from the county

397
00:16:14,064 --> 00:16:16,064
to see if we can 
work through this.

398
00:16:16,064 --> 00:16:18,331
At the County Commission 
this past week

399
00:16:18,331 --> 00:16:20,331
just before the County 
Commission meeting

400
00:16:20,331 --> 00:16:21,331
Mayor Wharton 
and I had talked

401
00:16:21,331 --> 00:16:23,631
and Mayor Wharton 
expressed his desire

402
00:16:23,631 --> 00:16:26,764
to not in any way take 
money away from education.

403
00:16:26,764 --> 00:16:28,864
So he and I agree on 
that particular point.

404
00:16:28,864 --> 00:16:31,564
I think what we have to do is 
just take a look at the law

405
00:16:31,564 --> 00:16:33,564
and get some 
understanding of the law

406
00:16:33,564 --> 00:16:36,098
and appreciation 
for that particular fact

407
00:16:36,098 --> 00:16:39,064
and if we can be 
assured that there'll be

408
00:16:39,064 --> 00:16:43,031
no financial adverse 
impact on education

409
00:16:43,031 --> 00:16:45,031
then certainly 
I'll be supportive

410
00:16:45,031 --> 00:16:46,264
of what the city 
wants to do.

411
00:16:46,264 --> 00:16:48,264
And hopefully we can 
work through that.

412
00:16:48,264 --> 00:16:50,864
I promised the County Commission 
I'd try to get back with them

413
00:16:50,864 --> 00:16:52,398
by their next meeting

414
00:16:52,398 --> 00:16:55,164
which will be a week 
from this coming Monday

415
00:16:55,164 --> 00:16:57,031
and see if we were able

416
00:16:57,031 --> 00:16:59,298
to get that particular 
question answered.

417
00:16:59,298 --> 00:17:01,364
That seems to be the 
issue that resonates

418
00:17:01,364 --> 00:17:03,364
with the County 
Commission as well.

419
00:17:03,364 --> 00:17:06,531
So I think we're all interested 
in giving the City of Memphis

420
00:17:06,531 --> 00:17:10,098
the discretion that they need to 
develop their property

421
00:17:10,098 --> 00:17:13,698
as long as it doesn't 
impact in any way

422
00:17:13,698 --> 00:17:15,698
the financing 
that we need

423
00:17:15,698 --> 00:17:16,698
for schools.

424
00:17:16,698 --> 00:17:19,698
And to just explain, 
this involves a formula

425
00:17:19,698 --> 00:17:22,898
for the distribution of the 
sales tax revenue

426
00:17:22,898 --> 00:17:26,064
within a zone of about 
three square miles.

427
00:17:26,064 --> 00:17:27,064
That's correct.

428
00:17:27,064 --> 00:17:30,864
And there is some kind of factor 
that's in there

429
00:17:30,864 --> 00:17:33,664
that is kind of 
at the heart

430
00:17:33,664 --> 00:17:36,464
of whether this happens 
or it doesn't.

431
00:17:36,464 --> 00:17:37,464
Yes.

432
00:17:37,464 --> 00:17:40,098
There's a baseline that's 
established that ensure

433
00:17:40,098 --> 00:17:43,364
education will still get tax 
funding out of that district.

434
00:17:43,364 --> 00:17:49,931
The area for discussion is 
the increase in tax revenue,

435
00:17:49,931 --> 00:17:53,364
sales tax revenue, from the 
improvements in the TDZ

436
00:17:53,364 --> 00:17:55,498
that are in question.

437
00:17:55,498 --> 00:17:58,331
If the TDZ is going to 
generate more sales tax

438
00:17:58,331 --> 00:18:00,331
then we want to make 
sure that that formula

439
00:18:00,331 --> 00:18:01,898
for ensuring 
that education

440
00:18:01,898 --> 00:18:03,364
gets its share of 
the sales tax

441
00:18:03,364 --> 00:18:04,764
is still in place.

442
00:18:04,764 --> 00:18:07,498
And there seems to be 
some ambiguity in the law

443
00:18:07,498 --> 00:18:08,764
in that 
particular place.

444
00:18:08,764 --> 00:18:11,564
Do you have to go to the 
State for clarification on that?

445
00:18:11,564 --> 00:18:12,564
Not really.

446
00:18:12,564 --> 00:18:14,764
Well, yeah it is because 
the State's the one

447
00:18:14,764 --> 00:18:16,498
that actually 
approves the TDZ.

448
00:18:16,498 --> 00:18:17,764
It's not like 
the local level.

449
00:18:17,764 --> 00:18:19,764
A lot of that money 
goes to the State

450
00:18:19,764 --> 00:18:20,764
and then it 
comes back

451
00:18:20,764 --> 00:18:22,764
and it's distributed 
throughout.

452
00:18:22,764 --> 00:18:25,531
TDZ allows the local government 
to intercept some of that money,

453
00:18:25,531 --> 00:18:27,364
in my layman's terms, right?

454
00:18:27,364 --> 00:18:28,364
That's correct.

455
00:18:28,364 --> 00:18:31,364
As long as it's redeveloped to 
improve an area

456
00:18:31,364 --> 00:18:33,364
that otherwise 
isn't functioning.

457
00:18:33,364 --> 00:18:36,131
I think what we're 
really striving to do now,

458
00:18:36,131 --> 00:18:41,264
what the City's striving to do, 
is to be able to go to Nashville

459
00:18:41,264 --> 00:18:44,531
with some degree of unanimity 
on this particular project.

460
00:18:44,531 --> 00:18:49,298
It makes it a lot easier for the 
State to make a decision

461
00:18:49,298 --> 00:18:52,598
if they see county government 
and city government agreeing.

462
00:18:52,598 --> 00:18:55,364
If there's disagreement that 
makes it more difficult for them

463
00:18:55,364 --> 00:18:58,598
so we're trying to get our 
disagreements worked out

464
00:18:58,598 --> 00:19:00,798
at the local level before 
we take it forward.

465
00:19:00,798 --> 00:19:03,698
TDZ on some high 
level is, you know,

466
00:19:03,698 --> 00:19:07,464
we talk about changes in 
sales tax to redevelop an area,

467
00:19:07,464 --> 00:19:09,131
similar concept 
to a PILOT

468
00:19:09,131 --> 00:19:11,131
in the sense that a 
PILOT is about industry

469
00:19:11,131 --> 00:19:13,131
or companies that 
come in or that stay.

470
00:19:13,131 --> 00:19:16,531
A lot of criticism 
of PILOTs, I mean,

471
00:19:16,531 --> 00:19:19,164
from some people who say 
that's just a big tax break

472
00:19:19,164 --> 00:19:20,298
for corporations

473
00:19:20,298 --> 00:19:22,298
other people who say 
look you've got a,

474
00:19:22,298 --> 00:19:24,464
you know, that's one of 
our weapons to compete

475
00:19:24,464 --> 00:19:26,198
to keep 
companies in--

476
00:19:26,198 --> 00:19:27,198
I like to say tool.

477
00:19:27,198 --> 00:19:28,198
Tool, excuse me.

478
00:19:28,198 --> 00:19:29,198
[laughing]

479
00:19:29,198 --> 00:19:30,198
Well, yeah.

480
00:19:30,198 --> 00:19:32,198
I think some of the 
economic development folks

481
00:19:32,198 --> 00:19:34,198
that we've had on in 
the private sector

482
00:19:34,198 --> 00:19:36,198
have maybe referenced 
them as weapons.

483
00:19:36,198 --> 00:19:37,198
[laughing]

484
00:19:37,198 --> 00:19:38,198
But yes, in the 
public sector

485
00:19:38,198 --> 00:19:39,198
you might want 
to say tool.

486
00:19:39,198 --> 00:19:41,198
So, that debate, I 
mean what is it,

487
00:19:41,198 --> 00:19:43,198
some $100 million of 
PILOTs in the last number,

488
00:19:43,198 --> 00:19:45,531
I mean, Shelby County Memphis 
uses the PILOTs aggressively.

489
00:19:45,531 --> 00:19:47,531
Electrolux, which 
has been open,

490
00:19:47,531 --> 00:19:49,531
has a thousand people or 
so working there.

491
00:19:49,531 --> 00:19:51,531
Mitsubishi, all kinds,

492
00:19:51,531 --> 00:19:52,931
Nike just did a 
big expansion,

493
00:19:52,931 --> 00:19:54,931
I mean all kinds of 
local companies

494
00:19:54,931 --> 00:19:57,098
have either been 
retained or expanded.

495
00:19:57,098 --> 00:19:59,198
Smuckers jelly, peanut 
butter is about to do

496
00:19:59,198 --> 00:20:00,498
a big, just got 
a big PILOT.

497
00:20:00,498 --> 00:20:02,531
How do you feel 
about PILOTs?

498
00:20:02,531 --> 00:20:04,598
Do you feel like 
they're give-aways?

499
00:20:04,598 --> 00:20:07,698
Do you wish that you had a 
different tool than them?

500
00:20:07,698 --> 00:20:09,698
I do not think that 
it's a big give-away.

501
00:20:09,698 --> 00:20:11,931
We're always very 
careful with PILOTs

502
00:20:11,931 --> 00:20:13,931
to look at the 
benefit/cost ratio.

503
00:20:13,931 --> 00:20:18,764
And we never approve a PILOT 
where the benefit/cost ratio

504
00:20:18,764 --> 00:20:21,464
is less than one to one

505
00:20:21,464 --> 00:20:23,698
and typically 
it's going to be

506
00:20:23,698 --> 00:20:25,464
about one to 1.5

507
00:20:25,464 --> 00:20:27,564
which mean that 
for every dollar abated,

508
00:20:27,564 --> 00:20:29,864
we want $1.50 return

509
00:20:29,864 --> 00:20:32,698
though capital investment, 
through salaries, wages,

510
00:20:32,698 --> 00:20:36,431
things of that nature.

511
00:20:36,431 --> 00:20:41,664
So PILOTs do not give 
away tax money

512
00:20:41,664 --> 00:20:43,798
and that's one term 
that I hear so often.

513
00:20:43,798 --> 00:20:49,398
We give a dollar relief on taxes 
for a dollar plus return

514
00:20:49,398 --> 00:20:51,198
on that tax abatement.

515
00:20:51,198 --> 00:20:52,564
And it's not as, I mean...

516
00:20:52,564 --> 00:20:54,698
one clarification I think the 
media does a terrible job,

517
00:20:54,698 --> 00:20:57,598
we try, but I think 
generally there's a lot

518
00:20:57,598 --> 00:21:01,364
of confusion put out there 
about PILOTs in the media

519
00:21:01,364 --> 00:21:03,431
that most of the companies are 
still paying property taxes.

520
00:21:03,431 --> 00:21:05,431
They're still 
paying property taxes.

521
00:21:05,431 --> 00:21:06,964
It's just they're paying a lower 
rate because they're investing.

522
00:21:06,964 --> 00:21:08,131
Well they're paying 
the property tax,

523
00:21:08,131 --> 00:21:10,664
they're hiring more people 
and they're making capital

524
00:21:10,664 --> 00:21:13,731
investment and construction 
which benefits small business.

525
00:21:13,731 --> 00:21:16,431
Now, the second 
part of your question,

526
00:21:16,431 --> 00:21:19,964
we don't have that 
many tools in Tennessee.

527
00:21:19,964 --> 00:21:23,264
And in the tri-state area that 
we're in we're competing

528
00:21:23,264 --> 00:21:25,898
with two other states that have 
different tools than we do.

529
00:21:25,898 --> 00:21:26,998
That's gotta drive you nuts.

530
00:21:26,998 --> 00:21:29,031
I mean, it drives other people 
nuts because what happens is

531
00:21:29,031 --> 00:21:31,131
Shelby County gets 
compared to Nashville

532
00:21:31,131 --> 00:21:32,664
and everybody says well 
Nashville doesn't do PILOTs

533
00:21:32,664 --> 00:21:34,764
so why is Shelby 
County doing them?

534
00:21:34,764 --> 00:21:38,598
But Nashville isn't up 
against Mississippi,

535
00:21:38,598 --> 00:21:40,598
I mean, 10 feet 
from Mississippi

536
00:21:40,598 --> 00:21:43,231
where Mississippi can do 
all these creative things.

537
00:21:43,231 --> 00:21:45,231
Base a company there 
but, oh, by the way,

538
00:21:45,231 --> 00:21:47,231
you're going to be based 
in Desoto County

539
00:21:47,231 --> 00:21:49,764
but you've got the Grizzlies and 
the Tigers and a, you know,

540
00:21:49,764 --> 00:21:52,164
an international airport or a 
big airport and all the things

541
00:21:52,164 --> 00:21:53,698
that a big city has, right.

542
00:21:53,698 --> 00:21:55,464
Nashville's not up against that.

543
00:21:55,464 --> 00:21:57,431
We were in a meeting 
the other day

544
00:21:57,431 --> 00:21:59,298
where just that issue was 
being discussed.

545
00:21:59,298 --> 00:22:01,731
We were talking about, 
from a regional standpoint,

546
00:22:01,731 --> 00:22:03,364
how can we 
complement each other?

547
00:22:03,364 --> 00:22:06,664
We had Mississippi, Arkansas 
and Tennessee people there

548
00:22:06,664 --> 00:22:07,998
and that very issue 
was discussed

549
00:22:07,998 --> 00:22:10,064
because we are 
different from Nashville.

550
00:22:10,064 --> 00:22:11,364
We're different 
from Little Rock.

551
00:22:11,364 --> 00:22:13,031
We're different from Louisville.

552
00:22:13,031 --> 00:22:16,164
All cities that 
we're often compared to,

553
00:22:16,164 --> 00:22:17,664
we're different than they are.

554
00:22:17,664 --> 00:22:20,064
Chattanooga is in a little bit 
of the same situation

555
00:22:20,064 --> 00:22:20,764
that we're in

556
00:22:20,764 --> 00:22:23,031
because they've got Georgia 
and Alabama that border them.

557
00:22:23,031 --> 00:22:25,464
But even more so than 
Chattanooga

558
00:22:25,464 --> 00:22:27,264
we're different because 
our MSA

559
00:22:27,264 --> 00:22:29,831
is so much 
more concentrated.

560
00:22:29,831 --> 00:22:34,664
So, we have got to think 
of creative ways to work

561
00:22:34,664 --> 00:22:37,264
and we can do 
that through PILOTs,

562
00:22:37,264 --> 00:22:41,398
we can do it through other types 
of infrastructure incentives.

563
00:22:41,398 --> 00:22:44,631
But we really just don't 
have a great deal going for us.

564
00:22:44,631 --> 00:22:47,864
What we do have going for us 
is we have a very low cost of

565
00:22:47,864 --> 00:22:49,864
living in a very 
urban environment.

566
00:22:49,864 --> 00:22:54,198
People complain about our tax 
rate being high but we're still,

567
00:22:54,198 --> 00:22:56,198
from an 
affordability standpoint,

568
00:22:56,198 --> 00:22:58,198
we're a very 
affordable community

569
00:22:58,198 --> 00:23:00,431
and we have got to look at 
those things

570
00:23:00,431 --> 00:23:02,564
that really sell 
our community.

571
00:23:02,564 --> 00:23:04,564
And if we can get our 
schools in good shape,

572
00:23:04,564 --> 00:23:06,564
if we can have our 
property values affordable,

573
00:23:06,564 --> 00:23:08,631
if we can effect crime and 
get crime under control...

574
00:23:08,631 --> 00:23:09,631
Right and crime is down.

575
00:23:09,631 --> 00:23:11,631
We have just three 
minutes left in the show.

576
00:23:11,631 --> 00:23:13,064
Crime was down 6% last year

577
00:23:13,064 --> 00:23:15,064
in the whole area 
of violent crime

578
00:23:15,064 --> 00:23:16,064
and all that.

579
00:23:16,064 --> 00:23:18,164
So your role in 
that is what,

580
00:23:18,164 --> 00:23:20,164
contributing to 
crime prevention?

581
00:23:20,164 --> 00:23:22,164
Well, again, public safety 
is a basic function

582
00:23:22,164 --> 00:23:23,164
of county government.

583
00:23:23,164 --> 00:23:26,131
If you look at the definition 
of what county government

584
00:23:26,131 --> 00:23:30,164
is responsible for 
covering is education,

585
00:23:30,164 --> 00:23:32,631
safety and health are 
the three main pillars.

586
00:23:32,631 --> 00:23:35,064
And id you think what 
all falls under that,

587
00:23:35,064 --> 00:23:38,598
education, safety and health, it 
covers a pretty broad territory.

588
00:23:38,598 --> 00:23:41,831
It's interesting, I was talking 
to one of my counterparts in

589
00:23:41,831 --> 00:23:42,831
another large city

590
00:23:42,831 --> 00:23:46,998
and he was saying how 
they had been successful

591
00:23:46,998 --> 00:23:49,098
was the fact that they 
sold the fact

592
00:23:49,098 --> 00:23:50,264
that they had 
good schools,

593
00:23:50,264 --> 00:23:51,898
they had a low 
crime rate

594
00:23:51,898 --> 00:23:53,364
and they had 
amenities.

595
00:23:53,364 --> 00:23:54,531
They had 
beautiful parks,

596
00:23:54,531 --> 00:23:55,631
they had 
greenways,

597
00:23:55,631 --> 00:23:57,631
they had the theater, 
they had the ballet,

598
00:23:57,631 --> 00:23:59,498
the community 
theater.

599
00:23:59,498 --> 00:24:04,964
If we can build the 
infrastructure of amenities

600
00:24:04,964 --> 00:24:05,964
within our 
community

601
00:24:05,964 --> 00:24:11,131
that will go a long way toward 
really selling our community.

602
00:24:11,131 --> 00:24:13,131
Then we don't have to 
rely as much on PILOTs.

603
00:24:13,131 --> 00:24:15,131
Bill, just a 
couple minutes left.

604
00:24:15,131 --> 00:24:16,131
All right.

605
00:24:16,131 --> 00:24:18,864
We were at the Electrolux 
opening just a while back there

606
00:24:18,864 --> 00:24:20,964
and what happened 
when we got that,

607
00:24:20,964 --> 00:24:25,698
when we got Mitsubishi, there 
was this euphoria at first

608
00:24:25,698 --> 00:24:29,364
and then there was 
kind of this concern

609
00:24:29,364 --> 00:24:32,364
about do we have workers 
adequately trained for it.

610
00:24:32,364 --> 00:24:35,098
Where do you think we are in 
terms of workforce investment

611
00:24:35,098 --> 00:24:37,764
and getting the right 
workers in the right jobs

612
00:24:37,764 --> 00:24:38,798
with those new places?

613
00:24:38,798 --> 00:24:41,331
Well, we're recognizing that 
we still have much to do

614
00:24:41,331 --> 00:24:44,464
to prepare our workforce 
for the 21st Century.

615
00:24:44,464 --> 00:24:46,598
Our Industrial Readiness 
Training Program

616
00:24:46,598 --> 00:24:49,598
where we have gotten some 
support from the state

617
00:24:49,598 --> 00:24:52,664
we're using Southwest 
Tennessee Community College

618
00:24:52,664 --> 00:24:54,898
to help us work with 
some of those people

619
00:24:54,898 --> 00:24:57,564
that need some brushing 
up on their basic skills.

620
00:24:57,564 --> 00:25:01,498
It's a concentrated eight-week 
program that helps us

621
00:25:01,498 --> 00:25:04,064
get those folks ready for 
the market today.

622
00:25:04,064 --> 00:25:06,898
Our challenge, Bill, 
is really two fold.

623
00:25:06,898 --> 00:25:08,331
We've got to 
continue to invest

624
00:25:08,331 --> 00:25:11,298
in industrial readiness training 
programs that very quickly

625
00:25:11,298 --> 00:25:13,831
ramp up the skill set 
of our workforce.

626
00:25:13,831 --> 00:25:18,031
But then also it tells us that 
your public education system

627
00:25:18,031 --> 00:25:20,164
has really got to 
be strengthened

628
00:25:20,164 --> 00:25:21,898
to work on 
those core values.

629
00:25:21,898 --> 00:25:23,898
I've got to put in a 
plug for one thing

630
00:25:23,898 --> 00:25:25,898
that Superintendent Hopson 
is doing right now

631
00:25:25,898 --> 00:25:27,331
with the school 
system.

632
00:25:27,331 --> 00:25:31,031
He's identified 
elementary reading level

633
00:25:31,031 --> 00:25:33,331
as being a priority of 
his administration.

634
00:25:33,331 --> 00:25:35,498
Focusing on grades 
one through three,

635
00:25:35,498 --> 00:25:38,664
getting our students 
up to skill level.

636
00:25:38,664 --> 00:25:41,864
Right now, about 30% 
of our third graders

637
00:25:41,864 --> 00:25:43,898
are reading at 
grade level.

638
00:25:43,898 --> 00:25:45,898
We've got to do 
better than that.

639
00:25:45,898 --> 00:25:48,631
So we've got to start working 
on our public education

640
00:25:48,631 --> 00:25:49,931
to ramp up this workforce

641
00:25:49,931 --> 00:25:52,798
and then in the short 
term work on our

642
00:25:52,798 --> 00:25:54,798
industrial readiness 
training programs

643
00:25:54,798 --> 00:25:55,964
where we tailor programs

644
00:25:55,964 --> 00:25:57,964
to the needs of the 
particular industry.

645
00:25:57,964 --> 00:26:00,664
We have worked with 
Electrolux in that area.

646
00:26:00,664 --> 00:26:04,098
We worked with many other 
industries in that area

647
00:26:04,098 --> 00:26:06,098
and that'll continue 
to be a priority.

648
00:26:06,098 --> 00:26:07,264
And we just 20 seconds left.

649
00:26:07,264 --> 00:26:09,898
You are filed for re-election?

650
00:26:09,898 --> 00:26:11,198
I have drawn my petition.

651
00:26:11,198 --> 00:26:14,164
I intend to run for 
re-election this year.

652
00:26:14,164 --> 00:26:15,164
That in?

653
00:26:15,164 --> 00:26:16,164
In August.

654
00:26:16,164 --> 00:26:17,164
In August.

655
00:26:17,164 --> 00:26:18,164
Mhmm.

656
00:26:18,164 --> 00:26:19,164
Primaries coming up.

657
00:26:19,164 --> 00:26:20,164
Ok, thank you for being here.

658
00:26:20,164 --> 00:26:21,164
Thank you, Eric.

659
00:26:21,164 --> 00:26:22,164
Thank you, Bill.

660
00:26:22,164 --> 00:26:23,198
Thank you for joining us.

661
00:26:23,198 --> 00:26:23,998
Join us again next week.

662
00:26:23,998 --> 00:26:25,664
Good night.

663
00:26:25,664 --> 00:26:26,664
♪♪♪