Its logical to reject a PILOT moratorium. But its both logical and fiscally responsible to reform PILOTs. After all, the data makes an overwhelming case against current payment-in-lieu of taxes (PILOT) driven economic development policy. Values supporting continual competitive decline are culturally embedded into board performance of local economic development agencies, while the small few feed on a Memphis community in need. The former is the unquestioned brainchild of such civic idiots as Puke Hyde and Blackjack Smith.
In County Commission today, as system stakeholders, both Beverly Robertson, Chamber and Reid Dulberger, EDGE signaled an openness to PILOT reform, while being against a PILOT moratorium. Both Robertson and Dulberger should be asked to present 1) their definition of economic development, 2) data supported research to support their positions on PILOT policy recommendations 3) what is meant by the term “free markets” and 4) what is meant by the term “business friendly”.
In considering the answers to the above, the Commission should understand that the Chamber is not an economic development but a business development organization whose members are financially driven by profits. Nothing wrong with profits, but profits are not in direct alignment with the financial incentives of the public sector. EDGE on the other hand, is fee incented to award large corporate/real estate PILOTs, with board members, that often professionally benefit from such awards. This fee configuration is contradictory to the financial well being of the public sector.
To that extent, abolishment of abating boards or new board appointments may be needed to carry out the work of real economic development. Real economic development is typically defined around improving the quality of life, mostly accomplished through increased wages, which is in financial alignment with County government but not the Chamber and EDGE.
Commission Discussion
While Commissioner Sawyer’s commendable PILOT moratorium lacks support for passage, it appears to have been successful at starting the PILOT reform discussion, with the aid of Commission Chairman Eddie Jones. Sawyer’s remarks around reform seemed to focus on community benefit programming. But much of that, like MWBE and affordable housing, has already been weaponized against the Memphis community in support of excessive PILOTs, that undermine the local tax base.
For example, established local businesses and affluent individuals dominate EDGE MWBE receipts. The greatest community benefit comes in the form of eliminating excessive PILOT awards, in support of taxpayer justice, that more appropriately funds education, public health, transit, roads and etc for all.
Commissioner Michael Whaley focused on reigning in PILOT extensions. But fiscally speaking, extensions are just the tip of the iceberg and have the same fiscal impact as does new PILOTs for the same property (FedEx WTC) or abating existing real property taxes (Ubiquiti), which are both commonly done.
Commissioner Edmund Ford touted successful community builder PILOTs and the need for better communication with abating boards. No one is sounding the alarm against community builder PILOTs that, for example, support grocery store construction in a food desert. And communication can be most easily improved with easy to understand, data driven web based technology to inform real time oversight, which has been professionally proposed by this blog.
Data and PILOT Policy
The data is explicitly clear that current PILOT policy is not working. This is expressed in the form of sluggish and below average job growth, average wage growth, median household income growth and deficient small business establishments to power the local economy. With an excessive 512 PILOTs, which dwarfs other TN municipalities by approximately 10x, the data clearly points to the need for PILOT reform. For an expanded view, see this comprehensive data set.
PILOT Reform
First, County government needs to see themselves as the County’s chief economic development organization while seeing the Chamber, as an influential stakeholder and not a partner.
Partner recognition of the Chamber blurs the lines of public and private accountability. Memphis needs to strengthen its public sector, as many local problems are rooted in the public sector’s weakness while mistakenly trusting in the “vision” of idiots Puke Hyde and Blackjack Smith and their public-private complex.
With clear lines, the County should then author their own defined economic development plan, with robust debate and measured stakeholder input, while reforming PILOTs. PILOT reform would, ideally, look like the following:
- Validate that current PILOT policy is a failure through data informed from authoritative sources like County Government, State Comptroller, Census and Bureau of Labor and Statistics. Local officials do not need local abating board data to validate this failed reality.
- Use a standard baseline of 10 yr term length for PILOTs, which is a common standard elsewhere with no community participation requirements like (MWBE). This effectively serves the entire community and education through taxpayer justice, by reducing overall amounts through reduced term lengths. Sham “MWBE” and “affordable housing” have been tactically used to justify excessive PILOTs and taxpayer injustice.
- Use research, such as the Upjohn sponsored research of Dr. Timothy Bartik, in guiding assumption development in projecting tax revenue
- Apply research to project tax revenues and incentive sizing, while getting off the 75% abatement for all amount and insuring a return for taxpayers. When referencing County documentation, abatements outstrip year over year (YOY) revenue gains, nearly 5 to 1. Had PILOTs worked, as promised, YOY revenue gains would have exceeded or, at least, been in line with PILOT abatements.
- Offer additional PILOT years for elective community participation in areas like properly overseen MWBE and affordable housing.
- Consolidate abatement boards, while financially aligning their financial incentives with real economic development and consolidating abatement and economic development measurement into a single web based platform to facilitate real time oversight.
Conclusion
Through a failed and sheltered narrative, FedEx and Memphis Tomorrow have had their foot on the throat of Memphis for too long. When one studies the data, its stunning the elitists actually believe that this is good for themselves, but they do. This delusion reveals their complete backwards idiocy…..