Public measurement of the public-private complex is the only solution for Memphis. Runaway elitism has taken its toll on Memphis and Shelby County. The former occurs, as small business and the taxpayer shoulder the burden of elitist corporate/real estate interests through increased fees and a competitively declining ecosystem.
Meanwhile, its Ground Hog Day in Memphis with Mayor Strickland announcing yet another workforce development initiative. The announcement of the “Public Service Corps” to also support a cleaner Memphis comes on the heels of the failed workforce initiatives in GMACW and ACT WorkKeys.
Additionally, the cleaner Memphis need comes with the existence of other similar initiatives in Clean Memphis and City Beautiful. All of these failures could have been avoided with reliable public measurement and oversight to support implementation of taxpayer funded initiatives. This absence of measurement brings me to my meeting with Richard Smith some time ago.
Meeting With Richard Smith
About 2 years ago, I sent out broadcast email alerting a local audience that the Memphis Tomorrow CEO organization was down in all categories over 20 years as their initiatives use your federal, state and local tax dollars with an openness to meet with anyone interested in learning more. Surprisingly, Richard Smith responded and agreed to meet.
Richard and I met for about 90 minutes on Friday March 2, 2018. This meeting followed the March 1, joint City Council/County Commission meeting where local legislators voiced their displeasure with the Economic Development Growth Engine (EDGE). In the meeting, now City Council Chair, Patrice Robinson said, “We need to just stop incenting those low wage warehousing jobs”. As a note, since that event, Robinson never has moved any legislation to address her concern. But the publicly administered TIFNI measurement solution would provide Robinson with a basis to curb excessive incentives for low wage jobs as they are losers for the taxpayer.
As far as the 90 minute meeting with Richard, it was a professional exchange of ideas with productive agreement and disagreement here and there. But where there was strong agreement was on Smith’s exclaimed point in “There is no measurement generally or [specifically] push back on EDGE incentives !”. Richard was right, at the time, the Brookings FOCUS economic development plan, led in part, by former FedEx Chief Counsel Christine Richards, was unmeasured and failing while EDGE used bogus projection accounting to justify excessive incentives.
The disconnected workforce development system was also discussed where I shared with Richard an employer, data-driven approach to workforce development. In that exchange, I discussed ACT WorkKeys as a career readiness assessment and the fact that “Customer and Personal Service” was the #1 area of in demand knowledge across all occupations while recommending its thematic inclusion in the academic curriculum. To which, Smith replied as he enthusiastically took notes, “That’s a great idea !”.
When Richard and I met, Richard was new to the scene and I had been observing oddities in the Memphis public-private complex for almost 2 years. After having worked throughout the country, I knew there were massive deficiencies in the Memphis Tomorrow leadership complex and with implementation generally. At the time, I attributed those problems to the hack elitist Pitt Hyde and thought at the time of the meeting that Fred Smith and FedEx were mere bystanders.
Little did Richard and I know at the time, that both Fred Smith and Pitt Hyde were resolute in stifling my small business which addressed connecting the workforce development system. But from the top of the ecosystem, that is the culture in Memphis, with historically lagging small business vitality that dismisses the taxpayer and the local small business community.
The Monday after our meeting, Richard started his “disruptive” campaign chronicled in part in a recent Memphis Business Journal article. Richard’s disruption, which involved confronting the Memphis Tomorrow crowd, of which FedEx is actually heavily involved, would soon soften to that of a whimper with only the creation of yet another entity entitled the “Shelby County Regional Economic Development Agency”. There were no changes to EDGE or measurement implementation as disconnected workforce development and excessive corporate/real estate incentives continued for the benefit of the small few in a Memphis community in need.
What Memphians need to know, is that throughout the country, communities announce a grant and then start implementing 6 months down the road with supporting measurement, oversight and course correction when needed. Course correction, strangely, does not happen in Memphis. Instead, maybe some joke report appears a year down the road with implementation, probably never happening. There is effectively no measurement or oversight. This is why the FedEx/Memphis Tomorrow complex is down in all categories over almost 20 years with still a disconnected workforce development system after 5 years.
The elitist FedEx/Memphis Tomorrow complex has no idea who the customer is in taxpayer funded initiatives. But there are available LOSB solutions to confront runaway elitism and the decline of the Memphis ecosystem.
TIFNI Measurement and Trustee Report
The tax incentive fiscal note impact (TIFNI) measurement platform is a taxpayer centric solution that confronts runaway elitism and Memphis ecosystem decline. TIFNI also provides a measurement platform for the public-private complex while recognizing the taxpayer as the customer in publicly funded initiatives. It delivers on Richard Smith’s voiced concern while rebuking runaway elitism with measurement and a fiscal note for each abatement that everyone can understand.
Currently, and thanks to the Trustee’s office, the only reliable tool that is available for tax incentives is the Shelby County Trustee Report. The report, while helpful, in isolation, is inadequate to measure return on taxpayer investment of tax incentives. This is why the Trustee has repeatedly called for an integrated database in the annual Trustee report and why Trustee Regina Newman has shown favor toward TIFNI.
For example, in digesting the multiple section report, I concluded that there were underpayments on PILOTs. While I await clarification from the Trustees office, this does not appear to be the case. What one must do to see the full PILOT payment is to add the owner section to the debt service section. Additionally, there is no direct relationship between many of the PILOT parcels and PILOT projects which causes further confusion. The PILOT owner is often a landlord and not the PILOT project owner.
At the same time, while offering 75% abatement or more to everyone and with 431 PILOT parcels in existence compared to the other municipalities in the State at 50 or less, one can safely conclude that corporate/real estate PILOTs are excessive in Memphis.
Given this, TIFNI provides a consolidated database for tax incentives with return on investment analysis to right size PILOT awards. With TIFNI:
Taxpayers will know the return on investment (ROI) of economic development investments
Policymakers will understand economic development modeling to project future tax revenue
Policymakers will understand and apply the assumptions used in economic development modeling to project future tax revenue
Taxpayers will better understand the effectiveness of public-private initiatives with access to a measurement platform
Without TIFNI local leaders cannot practice oversight and the taxpayer is in the dark.
Conclusion
Through LOSB innovation, TIFNI delivers needed customer taxpayer centric measurement to the public-private complex to support the evolution of the Memphis ecosystem. And it also delivers on Richard Smith’s concern of needed measurement.
Without TIFNI, runaway elitism continues with local small business and the taxpayer shouldering the burdnen in a Memphis community in need.