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Taxes and spending and metropolitan government

by Barry Henderson

When Knox County Mayor Mike Ragsdale came out this week with his budget proposals, it became more clearly evident than ever before that the county is on much better financial footing than the city.

The county can work through its own budget problems and look ahead to needed projects by raising the wheel tax to $30 on vehicles registered here. That’s approximately where that tax should have been 25 years ago, although a much less regressive version would be based on Blue Book values. The county’s property tax rate stays stable at a time when the city’s is rising by 35 cents. The city tax increase is both reasonable and well reasoned out by Knoxville Mayor Bill Haslam, who is attempting to maintain service levels and build in a few projects in his first year in office, but one of that increase’s causes and continuing implications can’t be ignored. The city’s property tax base is growing painfully slowly, while the county’s is more robust. With annexation at a standstill, that condition will very likely continue.

Redevelopment is the city’s potential savior, as there is very little usable land left to develop inside the city limits. But that potential, too, is limited. There are only so many new residential or business units possible downtown or along the arterial highways in the city. The real estate is used up, in practical terms, while the county’s is still relatively open to new development, both residential and commercial.

That said, the city and its downtown represents the county’s core, and the county would be a veritable municipal wasteland without it. Fortunately, the county’s mayor recognizes the value of that city center as much as the city’s mayor does.

Ragsdale is committed to supporting downtown Knoxville and its redevelopment, just as Haslam is. The county mayor looks at the county as a whole, which is refreshing, since all city dwellers pay county taxes. The city mayor’s viewpoint is equally broad. Each of them sees beyond their narrow borders as well, realizing that both Knoxville’s and Knox County’s fortunes ride to a considerable extent on good or bad prospects for the region and state.

This would be an ideal moment, then, to begin thinking again about combining the two units and streamlining the entire governmental structure here.

All the past failures at establishing a single metropolitan government notwithstanding, the timing will probably never get any better to consolidate the two governments than in the Haslam/Ragsdale years. They get along well together and have no recognizable turf wars building.

Getting a metro charter commission appointed should not raise much controversy. Taking that commission’s recommendations to the governing bodies and the public should not pose severe stumbling blocks, if both the mayors get behind the charter. There’s always the obstacle of getting enough voters in the county outside the city to favor such a metro plan. But it would be better for them, as well as city voters, in the long run. It would be up to our leaders to convince the voting public of that, and if the city and county has had more convincing leaders in the past than Ragsdale and Haslam, it’s not been in our memory.

In terms of sheer efficiency and best uses of tax dollars, a combined city-county government would necessarily bring with it the opportunity to provide better services for less money. Just eliminating the duplication, as Ragsdale has done in the last year to cut school spending by providing county support to the schools, would reduce the demand for tax revenue.

Through years of neglect of its city center, the county has advocated or acquiesced to suburban sprawl at the expense of its reason for being. The city has, with the exceptions of its schools and libraries, which it dumped on the county, continued to subsidize that sprawl in the vain hope of annexing it all. Those times should be over and done with. The city and its former school system are not parallels. The city should never even think in terms of turning in its charter and leaving the county to contend with the whole of the city-county constituency on its own.

What should have happened long ago should happen now, meaning as soon as possible. The city and county should merge their efforts. A new charter is the answer to a smooth merger. Let’s get together in that effort by encouraging the leadership to move forward with it.

May 6, 2004 • Vol. 14, No. 19 © 2004 Metro Pulse