TAX NEWS - June 2010

Tennessee Tax: Property Tax Hike May Be Left Up To Memphis Voters

MEMPHIS, Tennessee -- A property tax hike could be put in the hands of Memphis voters.

City Councilman Harold Collins wants a referendum put on the ballot in November, that would allow voters to decide if they want to pay additional property taxes to support education.

Collins said, "The only way to pay for it is through a property tax. We can't do anything except raise property taxes."

If voters approved a referendum, Collins says taxes would go up. If it failed, Memphis would continue fighting an ongoing lawsuit over funding with Memphis City Schools.

According to Collins, if it failed, city leaders could to go Nashville and ask lawmakers to change laws. Those changes could result in Memphians not having to fund Memphis City Schools.

"It would gage the temperature of the public. The downside is that it is meaningless," said Councilman, Jim Strickland. He went on to say there are pro's and con's to putting the issue before the voters. "A referendum by the people, can't overrule a judges order of the court."

The City of Memphis and Memphis City Schools have been engaged in a long running court battle over funding. The City of Memphis believes it does not have to give $78 million a year to Memphis City Schools, saying Shelby County is responsible for funding education.

The lawsuit may finally be decided by the Tennessee Supreme Court. That decision could be made by the end of the year.