Memphis tax hikes: City Council passes three increases to balance $858 million budget
Editor's note: This story has been updated to correct the spelling of Chase Carlisle's name.
Memphis City Councilmembers passed three tax increases Tuesday to balance the about $858 million fiscal year 2025 budget.
The city property tax will increase by 18.2%, but that is lower than Mayor Paul Young's previously proposed 75-cent increase. Various vehicle registration fees also saw an increase as did the solid waste fee.
The solid waste fee also increased, hiking the fee by $12. During Monday's budget meeting, Councilman Chase Carlisle said that the increases were needed in order to balance the budget.
Carlisle said that the increase would allow for the Memphis Solid Waste Department to accelerate their loan repayment back to the general fund "to the tune of about a million dollars a year."
The hike passed with only Councilman Phillip Spinosa voting against the measure.
Property tax increases 49 cents
Early in the week, Councilman Edmund Ford. Sr. proposed a middle ground to the mayor's 75-cent property tax increase, for an increase of 55 cents instead. The council then made various cuts in the budget, letting the tax increase drop down to 49 cents.
Carlisle made an amendment to lower the increase to 49 cents due to cuts to the various allocations in the budget like advertising and publishing and city council travel expenses.
The city's property tax has not been increased since 2012, and since then the costs of city services have increased dramatically and the loss of federal grants from the COVID-19 pandemic has impacted the city's bottom line.
The previous property tax rate for Memphis residents was $2.70. Memphis residents pay both city and county taxes and pay the most in property taxes in all of the state.
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The city has been using the fund balance to cover the increase in the cost of services, which has taken a hit to the city's general fund.
The increase would aid in confronting the deficit between the revenue and costs the city is facing, which are upwards of $64 million.
Carlisle said that the city started with $114 million in its fund balance 12 months ago and will end the year with $40 million.
The general fund is recommended to have two months of operating costs, estimated at $80 million by bond rating agencies and $140 million by the Tennessee Comptroller of the Treasury. Carlisle said during previous budget meetings if the council did not pass a balanced budget that does not rely on the general fund to fund various city operations, the city could receive a letter from the Tennessee Comptroller.
Vehicle registration fees increased
The car registration fee increases are estimated to bring in an extra $13 million, but Councilwoman Jerri Green said it has been difficult to get a true estimate as the Shelby County Clerk's Office has not responded to Green or the administration.
Shelby County Clerk Wanda Halbert said in an email that communications from the city were sent to a "public email address" and the individual responsible for responding to them was "out for a few days."
The proposal puts various increases to all the different vehicle registration classes.
Some vehicle classes never had a registration fee associated with them, like mobile homes or house trailers of up to eight feet wide and those exceeding eight feet wide, and private busses.
Here is what each vehicle fee increased to:
Class A commercial motorcycle: increased to $16.75
Class B, motorcycles with three wheels, used in furtherance of a commercial enterprise: increased to $23.75
Class C, commercial passenger motor vehicles: increased to $60
Class D, privately owned trailers: increased to $14.50
Class D, mobile homes or house trailers up to eight feet wide: increased to $24.
Class D, mobile homes or house trailers (exceeding eight feet wide): increased to $36.
Class E, private buses (not for hire): increased to $205
Class F, low-speed vehicles: increased to $14.50.
Class G, medium-speed vehicles: increased to $14.50.
Class H, class I off-highway vehicles: increased to $15.
Class H, class II off-highway vehicles: increased to $16.
The Shelby County Clerk's Office will be responsible for executing the increases.
Other budget actions
All City of Memphis employees will also receive a pay increase. The amount varies depending on which department the employee works for due to the City Council passing impasse resolutions depending on what unions advocated for.
City employees who are a part of the American Federation of State, County and Municipal Employees union, Communications Workers of America union, International Association of Fire Fighters union, International Association of Machinists and Aerospace Workers union, International Brotherhood of Electrical Workers union and Memphian Police Association union all have different wage increase and bonus structures due to the passages of the various impasse resolutions.
The remaining city employees who are not a part of various bargaining unions all received a 3% wage increase.
This article originally appeared on Memphis Commercial Appeal: Memphis 2025 budget includes property tax, solid waste fee increases
