by Joe Sullivan
The Knoxville Area Chamber Partnership has hyped itself as the business community's voice of progress. But the heralded Superchamber's members don't seem prepared to put their money where its mouth is.
While championing the city's prospective new convention center, the Superchamber's board of directors has spurned Mayor Victor Ashe's request for support of an increase in the city's business gross receipts tax to help cover the $160 million tab. While its president, Tom Ingram, professes support for "fair tax reform" in Tennessee, the board denounced Gov. Don Sundquist's tax reform proposal without heeding its chairman's appeal to hold off until "we can come up with alternative solutions that are more business friendly." Indeed, from attending chamber board meetings and forums one gets the impression that the business community is just a bunch of "aginners" where anything that might hit them in the pocketbook is concerned.
If the Superchamber were still under the control of the small group of well-intended business oligarchs who formed it in the first place, the picture might be different. But diversity and inclusiveness have become the organization's watchwords over its first year of existence. So now it has a 50-person board and numerous committees whose decision-making processes are as unwieldy as they may be broadly representative.
Ingram defends this set-up as essential to community consensus-building. "I'm willing to accept a lot of flaws in the process in order to get a meaningful public dialogue," he says. But not even this consummate spinmeister can put a very positive cast on the way in which chamber backing for Ashe's proposed increase in the city's gross receipts tax got waylaid.
Following a presentation by the mayor, the chamber's Economic Development Committee had voted unanimously to endorse his proposed doubling of the tax, which would raise $3.5 million a year as one element of a $10 million to $12 million convention center debt service package. Before this endorsement reached the board, however, a small band of politically well-connected operators—principally restaurateurs, convenience stores and their wholesalers—worked behind the scenes to kibosh it.
The irksome irony is that these naysayers include the very business categories that stand to benefit the most from a new convention center, along with hotels and booze distributors. Instead of zeroing in on them, Ashe had taken a shotgun approach to raising revenue from every category of wholesaler and retailer, from garden supply and pet stores to pharmacies and opticians. His proposed increase in the levy would be on the order of one-tenth of a percent of sales at retail and one-fortieth of a percent at wholesale.
At the chamber's board meeting last week, Chair Sharon Miller informed her fellow board members that, "The issue is not before you." It's being referred back to committee where, she said, "I sense we need consensus building on alternatives." The only alternatives that anyone involved has come up with so far are property or sales tax increases or introduction of a wheel tax. Perhaps the chamber should form committees of property owners, car owners and consumers to consider these. But then again it wouldn't be worth the trouble because (A) public opinion surveys show a sales tax increase would be doomed to failure in the referendum required to adopt it; (B) there's no way on earth County Commission would approve a wheel tax that would have to be imposed on a county-wide basis; and (C) Ashe went the extra mile last year with a 27-cent property tax increase that will eventually be applied in large part to convention center debt service (though he won't now acknowledge it in this mayoral election year).
It's true that even if the chamber had endorsed it, the proposed increase in the gross receipts tax stood little chance of getting the requisite approval of the state Legislature in this year's tax-infested waters. But it's never going to make headway in Nashville unless the Knoxville business community gets behind it. Nor is any other convention center financing plan going to be made whole without a business contribution.
It may just be that the wheels of progress turn slowly at the Superchamber. But there would appear to be a lot of wheel spinning going on. And quite a bit of it is at taxpayer expense. The city of Knoxville contributes $200,000 a year and Knox County $140,000 to the chamber's $2.4 million annual budget. This to an organization that entreats or lobbies not only state government but also the very governments from which it gets sustenance on everything from business taxes to billboard regulations.
In 1996, Mayor Ashe advised the then Greater Knoxville Chamber of Commerce in a letter that "...it is my firm belief that the Chamber should become self-sufficient and not rely upon city government for a significant portion of its budget." But he has yet to carry through on his stated intent to phase out city contributions to the chamber over a five-year period.
We believe it's time he started. Or, if public funding is to be continued, it should be dedicated to the chamber's role in industrial and other new business recruitment to the Knoxville area. No doubt, Miller is correct when she says, "If we went into the budget, we could find more expenses on economic development than public support." Plant and office location specialists around the country are accustomed to working with chambers of commerce on siting a new facility, and the Superchamber has specialists in this field. But governmental funding for this public purpose should be segregated from the chamber's budget for representing private sector interests.
Ingram and his cohorts at the chamber's helm have lofty aspirations for the community. But when it comes to opposing the mayor or proposing added taxes on the citizenry at large, they should be in a position to do so without appearing to bite the hand that feeds them.
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