Behind the Headlines – September 20, 2019

Behind the Headlines – September 20, 2019


– (female announcer)
Production funding for Behind the Headlines
is made possible in part by: the WKNO Production Fund, the WKNO Endowment Fund, and by viewers like you.
Thank you. – The impact of the
sales tax referendum on benefits for fire and police, tonight on Behind the Headlines. [dramatic orchestral music] I’m Eric Barnes with
the Daily Memphian. Thanks for joining us. I am joined tonight by Chairman of the Memphis
City Council, Kemp Conrad. Thanks for being here again. – Thanks for having me, Eric. – Tommy Malone is President of the Fire Fighters
Association. Thank you for being here again. – Glad to be here, thank you.
-Along with Bill Dries, reporter with
The Daily Memphian. We’re talking about the
sales tax referendum, and at various points
I might actually just read from some
of the language. You are here representing the
Fire Fighters Union, Tommy, but you and the police union are by and large kind
of working together in terms of the advocacy for
this sales tax referendum, but we couldn’t get anyone from
the police union to be here. They declined to attend. I’m gonna start with you. I kind of flipped a coin, so I don’t know if
it’s better or worse, but I flipped a coin
that I would start with the union representative. This sales tax referendum,
early voting is underway, continues through September 28th and Election Day on October 3rd. This sales tax
referendum does what for your members and
for the police members? – It will restore the
pre-2014 benefits. Contrary to what’s
being put out, it doesn’t include everybody. As a city, they ran the
figures for everyone. It only includes pre-2014. Even on the pension side, anybody that came on
after July 1, 2016 are not included in this, simply because the law doesn’t
allow us to go after it. It was all the people that
were on the job prior to 2016 and when the
council and the city came up with some
arbitrary figure of seven and a half years, which was still a
misnomer to all of us. It has nothing to do
with every single one, as being put out. It’s a costed out thing and
it’s according to the law and the benefits that
we could go after. – And this is all on the
back of cuts to benefits that took place in 2014
for fire and police, changes to healthcare
benefits for retirees and the pension plan,
is that correct? – And kicking the spouses off of the active
people’s insurance. – And the sales tax hike,
and I’m gonna turn to Bill just so we can get our
bases covered here, it’s a quarter…? – It’s a half percent. – A half percent, which
would take the current rate right now is nine and a quarter, it would take it up to 9.75%. Of that amount, 7%
goes to the state. Currently, 2.25% goes to
the city and the county, and this extra .5%, which would
take it from .25% to .75%, the sales tax proposal presents
it as going to the city, but technically the
Shelby County Commission, Shelby County
government has the right if that increase goes through
to take half of that money. – Yes, it’s–
– (Tommy) No. – Okay, so it does not, okay. That is one big point, so I
wanted to do the best I could to kind of lay out
the numbers there. That is a big point that
people are pushing back on, that the proposal is
that all that money would have to go to the city and would have to
go to the things outlined in the referendum. Other people are saying no, the county has this right
to take 50% of that. You’re saying no. – Let me explain it. We went to the state, the
State Election Commission, the State Attorneys. We went to the city. There is an option
that the county could, with another referendum that
everybody would vote on, could get the money. If that did happen,
they would keep half, the city would get half. It would be about a $30
million windfall for the city. They can’t arbitrarily,
the county, if this passes, say we
want half of the money. They have to pass a referendum, which would negate
our referendum, and this is all the legalese and the state that
we’ve met with. The county had an option
to take this over. The city had an option
to take this over. – (Eric)
To do it through ordinance. – Right, and the bottom line is, the county can’t arbitrarily
take this referendum and say we want half. – Okay, let me get Kemp in. You are opposed, you’ve
been pretty vocal about being opposed
to, you and Edmund Ford from the County Commission
and former City Councilman co-authored an op-ed in
The Daily Memphian, vehemently opposing
this referendum. Why? – Well, first of all, I want to thank Mr. Malone
for being here today. I’ve enjoyed working with
him over the past 10 years, and you know, I
think it says a lot that the police
union is not here. I think when you can’t argue
the facts, you pound the table, and I think that’s what we’ll
hear a lot of from them. I think y’all are
helping make my point. It’s very confusing. We just spent five minutes talking about a referendum
this, the state this. The reality is, the
county can take half. It’s not just a vote. They have to go
through a process, but as an elected official,
when you sit in these seats, you have to look at
what is the risk? What could happen? And that is a very
real possibility. I want to say one thing, too. I’m doing this, I fought
for this five years ago and I’m speaking out for it now, because I think it’s
best for Memphis, and in my heart of hearts I think it’s best for
our first responders. There’s no amount of
money that you can pay a police officer or a fire
fighter for the job they do. They legit put their
lives on the line every single day, okay? However, we have a
responsibility to balance a budget and thus to pay them
fairly with a competitive rate to other places
they could go work, and in an honest way that’s
durable over the long term so they can know that their
pension is gonna be there, unlike the plan we
had in the past. We have already covered
this ground five years ago. We had three choices
five years ago, and we’ll have it
again if this passes. We could drastically cut
the size of government and have mass layoffs,
including fire and police, we could have raised the
property tax rate by about 30%, which would have put us
on a Detroit-like spiral to bankruptcy in my view, which would have jeopardized
the pension plan. People would have
gotten a fraction of what they were expecting. Or we could do reforms,
and that’s what we did. We shored up the pension plan because folks didn’t
have another option. They’re not on social security. People did have other
healthcare options, and the reality is, Mr.
Malone said we can’t do it because of the law. They’d like to get more
people in, he said that. There are folks on the
council who don’t believe fire and police should
be treated differently. I do. I believe they should have a different pension plan,
they do. So, when I look at
this, I have to look at what is the risk if this passes, and there is a very real risk that everybody goes
back into the plan. That’s always a debate
on the council, okay? So, this generates a little
over $50 million in revenue. The county could take
half, that’s $25 million, and if everybody goes
back in, it’s $43 million. I think in your Daily
Memphian article it was in the $30 million range. There’s a real reality that we are back in
the hole year one, and sales tax growth
grows like this. In a downturn, it probably
goes down $50 to $40 million. What are healthcare costs doing? That trendline is like this. We’re gonna be right
back in the same place, so this is a much bigger issue. It’s, do we want
to look backwards to the day, who you
endorsed for mayor, Mr. Malone, Willie Herenton? Do we want to look back to
the days of Willie Herenton, a rape crisis center
that didn’t work, untested sexual assault kits, a benefits policy
that didn’t work, or do we want to look
forward to a new Memphis where we’re creating 20,000
jobs, 3.8% unemployment, we’re hiring police officers,
attrition’s back to normal. – Let’s break down,
we have 20 minutes. We got 20 more minutes, so
we’ve got plenty of time to get through some
of these things, but I want to get to the
dynamic on the City Council. So, if the referendum passes, and let’s say just
to keep it simple, the county doesn’t step
in and take 50% of that, is the City Council, you’ve
been on for what, 10 years now, you’re two times Chairman,
bound to spend that money in the way that the
unions would like? – This would probably
another thing we can go back and forth
on for 5 or 10 minutes, and the answer is no. The City Council will
appropriate that money every year, so if people
vote yes for this, they’re voting to
tax themselves, and the language
is aspirational on, so the City Council
will appropriate it. – They can appropriate
it however they choose. Let me get Tommy in. We’ll come back to you,
we got plenty of time, and then I gotta get Bill in. Are you worried that the council won’t appropriate
it the way you want? – Not in the least.
– Why do you trust? – Number one, because
if you look at it, they know that would
create a lawsuit. That would be political suicide
for anybody that did that. If this passes by the citizens, the citizens are
passing an ordinance. Instead of the council
passing an ordinance, the citizens are
passing this ordinance according to the state. And Chairman Conrad
can say all he wants, and he can talk about
politics and who we endorsed and rape kits, has
nothing to do with this. It’s a narrow box. They’re trying to
make it a big box, because they haven’t
listened to the citizens. The citizens voted
Pre-K down 60-40. They funded Pre-K
with taxpayer dollars. They were not worried
about what was happening with that half cent when they were going to
try to use it for Pre-K. Pre-K was gonna go up, more
people were gonna be on it. Where was that gonna happen? The bottom line is,
the State Treasurer and the State Election
Commissions Attorney all have opined that this
is dictated by the citizens and that it’s an ordinance
that’s binding on this. – Let me bring Bill in. – I think from
what I have heard, that there is major
disagreement over the numbers of how much revenue this
is going to produce. Do you agree with the numbers
that Chairman Conrad had for how much revenue
this is gonna produce? – The number we’re using
came from the mayor, $57 million, when we
met with the mayor– – $53, $57, call it $50 million.
– We’re close. When we met with the
mayor, Bill, we listened. I did. We’ve been working on
this for two years. This isn’t something
we just dreamed up, and the mayor says,
y’all come up here with your hand out
with no solutions. Get me $35 million and
I’ll restore the benefits. That’s exactly what he
said, almost verbatim. So we went to work, and
the rest is history. We’ve been beating this
for a year and a half, getting citizens
talking to citizens. I know Chairman Conrad
mentioned something about it was a hoax, about
street paving and Pre-K. That’s what the citizens
said when we were out there. What are you gonna do
with the extra money? The reason they didn’t pay
us Pre-K the first time is because they had
all this excess money, and the citizens said, we’re not trusting
them with that money. The unions didn’t say that. The Memphis citizens said it. – It was also a sales
tax hike as well, which is a particularly
sensitive topic. Do you think that voters are
going to have a different view because of where the money
goes for it in this case? – Absolutely I do, because
the citizens are now realizing the turnover we’re having
in fire and police. That’s general fund dollars. That’s ad valorum money going
out the door by the millions when we can’t retain people. We’ve hired, I’ll
give everybody credit, we’ve hired, but
we’re not retaining. Since 2016, and the
number you talked about on the police department, they got a net gain of all
this 400 something people, they’ve hired 50, 52 people. – Because there’s so
many people leave. – That’s correct. – Kemp, there have
been pay raises, but the mayor
himself has also said that cutting the benefits
played some role, not the complete role, but
played some role in the problems that the city has had with
police and fire retention, police retention in particular,
so should something be done with the benefits
to improve that? – Something has been done. Again, I think we’re going
in the right direction. The answer for Memphis
is not going backwards in digging ourselves
back into the hole that we dug ourselves out of. It’s growth. We’re growing right now. We’re adding jobs,
we’re adding companies. There’s a lot of great
things going on in the city. That is how we are
going to grow Memphis so we can continue to pay
our first responders more. Fire over the last three years
has had pay increases, 10%. – (Tommy) That’s not true.
– Police, 9.75% to 11%. We’ve hired 450 police officers
over the last three years. We’re gonna hire 196 in 2019. That’s the most since 2019. Attrition levels, if you
want to know the facts, I’ve got them right
here for police and I’ve got them
right here for fire. The reality is there’s
always attrition, because people are leaving. We did have a blip in 2015. We are back to normal levels. Police is down 19% since 2014. We have a fire department
that’s fully staffed, and that is the reality. – Let me talk about
police for a second. – What would make Memphis
safer is to keep going in the direction we’re in and to continue to
grow in Memphis, not to go back and dig another– – We invited the folks from
the police union on it, and they declined to be here,
but is not the pushback, and I asked Mayor Strickland, he was on a couple weeks
ago, the same question. He was on the council when
these benefits were reduced. Was there, if you could go back, wouldn’t you have
done it differently, in the sense that crime, everyone can see that
crime has gone up. – It’s actually down,
year-over-year– – But there’s a
crime, let me back up. There is a big crime
problem in Memphis. There is a violent crime
problem in Memphis. The mayor, I assume you, are
saying we need more police. Was the cost of reducing
those benefits worth it, ’cause there’s a cost
associated with crime. There’s an economic
development cost, a quality of life cost, let alone the cost
of life and so on. Was there a better way to
have done it in hindsight? – The better way
to have done it, and Tommy may have
wanted to work on this, but most of the unions didn’t. The better way to have done it would have been eight years ago when I proposed retire tiering, retiree healthcare based
on years of service, so the longer you work, yeah, that would have been
a better way to do it. But the unions
for the most part, they didn’t want
to give an inch, and I said, if we don’t do
some of these things now, it’s gonna get worse and worse. That would have been better. I’m about solutions
in the center. We have no one to deal with. And the answer to
your question is yes. We are better off,
because our result would have been people laid
off, a 30% tax increase. – That’s the smoke and mirrors
they use, these high numbers. – (Eric) Hold on, hold on.
– (Kemp) Those are facts. – The unions didn’t
want to do anything, and he’s talking
about the police. I have numbers for the police. We’re not even near this
2400 that we’re looking at. – (Kemp) 2300 is the new goal.
– We got a little over 2,000. They dropped it from 24
something to 23 something trying to obtain it. They got a total
net of 51 people, but regardless of all that,
everybody sees that differently. The unions didn’t want to
do anything, that’s a crock. All of our union people are
willingly on the pension. We went up, everybody
that was invested, agreed, not made to, agreed. They went up a half cent
every year for three years on their contribution
to the pension. The city of Memphis says,
we’re gonna go up on ours, too. No, they did not. Our people are paying 8%. You know what the original
number that the city pays? 6%, they have to make it up because the state’s
making them do that. The number one thing, if
you read the articles, and this is not what I want to
debate about, what happened, but the bottom line when
you read the articles, Memphis is the cheapest city
paying their, we didn’t ask for the pension. Back in the ’70s, we said put
us back on social security. – Well, but aren’t
other cities faced with this sort of fiscal
cliff that pensions create? The whole state of
Illinois, for instance, has been teetering on the
verge of a catastrophe for years because of benefits. Didn’t some change
have to be made to make those
expenses manageable as pension and benefit
expenses manageable, particularly in a
city that suffers from a tremendous
amount of poverty and already has a
very high tax rate? – How do you change when
a city’s paying less than they would pay
for social security? They’re paying less
than they would pay per employee for
social security. They’re paying 6%
and it’s 6.25%, so you talk about Illinois. The fire and police pensions
in Illinois are not in trouble. He talked about Detroit. Detroit, the pension
plans in Detroit for fire was the most solvent
piece of work they had. So the thing about this is, we’re talking about
things have to be changed. Regardless if they had to be
or they didn’t, they were. Now the key is, we’re
trying to get it back through the direction
of, the city mayor said give me something to work
with and we’ll do it. – All right Bill,
let me get Bill. – If the thing was so bad,
the reason why the attrition, the one year there was a blip. These are the facts. We are back down to normal
levels of attrition. The reason we’re not back
and the number is lower, the net number is
lower than it should be is because the folks that
Mr. Malone’s organization and the organization that
wouldn’t show up here, because the person they’re
supporting for mayor and his predecessor
had no recruiting. It takes a while to
build a pipeline, so if things were so bad we wouldn’t be getting
these officers here and all these great things
wouldn’t be going on in Memphis. It’s because of those
decisions, as hard as they were, it was because of two
decades of dealings between the unions
and Mayor Herenton, who they are now supporting,
that got us into this mess. It was fiscal arson, frankly, and responsible people
had to put that fire out, and now that’s why I’m
speaking up on it again. Let me say, too,
talk about attrition, the police union,
who’s not here, I wish they were here
to defend themselves. Mike Williams, he
hosted recruiting fairs for other police departments, so don’t talk to me about
attrition and people leaving when you are hosting
at the Union Hall a recruiting fair
for other departments or paying for billboards. Are you with them, or
are you with the folks that will put the city
on the right track? That’s what this is about.
– Alright, Bill. – Tommy, this goes way
beyond dollars and cents. Is this an emotional issue? – Here’s the thing. The thing is, the city
can say what they want, and you just heard
the Councilman say we’re gonna grow
our way out of it. Well, if we grow
our way out of it, sales tax is gonna grow, too. Common sense, to me. Right now, the emotional part is the fact that people are
leaving their home city. We’ve got, since we’ve
started this petition, we’ve have numerous calls. As you know, I’m not speaking
for the police department, other than their numbers. The fire department has
got a lateral program. We’ve got a different
kind of hiring program. We lowered the age to 19. Since 2016, there has
not been 10% raise in the past three years. That’s totally off. Number two, we
lowered the age to 19. We still have a retention rate, since 2016 to today,
of less than 50%. Now, we’re not having a
problem hiring these people. They’re coming in. Three or four years, they
get all their experience, they get all their
certifications, and they’re a hot commodity. He talked about
what the police did. Let me tell you what
happened to fire. Dallas, Austin, Fort Worth, there was nine cities in here setting up in hotels
around the city, recruiting our paramedics
and firefighters, and it was successful. But here’s the big thing. We talk about we’re treating
our first responders so good. Our people leaving for German-
town, Collierville, Southaven. We used to recruit all
those people in here. We are now losing,
he says it slowed up. In my career, nobody ever quit the fire department in Memphis. – Kemp, to the point
about benefits, do pay raises alone make up
for the loss of benefits, or is there a plan down the road with economic growth to
improve the benefits? – We can’t afford
healthcare for life. Again, you can’t have a program where someone can
work for the city for 10 years and then retire, and even if they can go get
health insurance somewhere else, city taxpayers are paying
70% of their premium. The numbers don’t work, and of the pension
thing that Tommy said they were a part of solving for, and they were in that,
and I appreciate it. Of the $43 million of cost
if everybody comes back in, and I’m sure Mr. Malone
or the Police Association wouldn’t mind if everybody
got back into the program. Only $3 million of that cost
is the additional pension cost. $40 million of it
is healthcare cost. That’s where the big number is. We’ve provided a lot of
solutions for those folks, and the math doesn’t add up. If it’s $57 million, if the
county takes their part, even if they don’t,
we’re at $43 million. If there is a dip
in the economy, the numbers are
gonna cross again. We’re gonna be back
in the same hole. -(Tommy)
Where do you get to $40 million? – It’s the healthcare cost. – When they cut the
healthcare cost, they said it would
save $25 million. That’s in print.
– (Kemp) The difference in 2019- – The $40 million is
another smokescreen scare. – It’s PWC and
our finance team– – You told Wharton that you didn’t
trust their figures. – I don’t know what
you’re talking about. – I know you don’t.
– It’s $43 million, okay? That’s the number. That’s how we’ve been able
to fund the pension arc. We’ve done all this
without a tax increase. It was a $50
million annual lift. We put over $200 million
over the last four years into the pension plan,
over $25 million a year in pay raises, most of
those to public safety. Public safety is over
two thirds of our budget, $450 million out
of $708 million. Public safety is like this. Parks, youth, everything. We can only invest
so much in this. – Tommy, to his point
about the sales tax, bond rating agencies take
the position routinely that in terms of the
city’s financial stability, they would always rather
see a property tax hike than a sales tax hike,
because the sales tax rate and revenues that the city
derives from it can be unstable, depending on how the
national economy is going. Do you understand
or do you agree that there could be
problems down the road with pending restoring
these benefits on the sales tax
revenue figures? – Let me say this. First of all, let me
quote some figures. Number one, if we
raise the property tax, there’s roughly 650,000
people that live in the city. There’s a little
over 300 homeowners that would foot that bill. On the sales tax, there’s 650,000 people
living in this city. There’s a million and a half
people in this city every day, so we’ve got people
coming in here, double the amount of
people coming in here that will pay the sales tax. Then you follow up on what the Convention
and Business Bureau said. We have a million
people from out of state coming to Memphis every month, so no, I do not
think it’s a problem, or we would not
being going here. I am a taxpayer. – And since we’ve gotten
into that in the op ed piece that Kemp and Edmund Ford
wrote, they talked about the number of firefighters
and police officers who work for the city but
do not live in the city. Is that fair? – They talked about retirees
that don’t live in the city. Let me say this. A retiree, which I am one, that’s what you
work your life for, to be able to go
where you want to and live in less crime cities, or warmer cities,
or colder cities, but the main thing is,
they spent 25 to 40 years protecting and
fighting for this city, risking their life every day, so now as they get into the
twilight of their lives, that’s something you want
to hold against them? Well then, why does
he vote for MLGW to get their retirees
to get a raise? They don’t live in the city. – I’ll just say, I don’t care where our police and
firefighters live. – Right now, they’re
required to live in the city. – Listen, this is a tough job. I’d love for them to live here. It doesn’t matter to me. Retirees, I agree, but the point
is we have limited dollars, especially to Commissioner Ford, we’ve got a lot of
needs in Memphis, and when two thirds of
the folks don’t live here and all this cost, I
think that is relevant. Let me say one thing. They talk about
Pre-K and paving. The reality is, those
things poll well. There’s not gonna be any
money left for those things. We’ve already funded Pre-K. The city did it, we’ve
done it, full stop. It’s done. – (Tommy)
With taxpayer dollars. – 73, of course, taxpayer
dollars, Tommy, come on. $73.5 million dollars in
paving the last three years. The four years prior, with
his Mayoral candidate, $40 million, we’ve doubled our
paving budget– – This is not an election
campaign here at this table. – These are the stakes. Do you want to go back? – We are out of time. I want to thank you
both for being here. Early voting goes
through the 28th, Election Day is October 3rd. Bill has done profiles
and interviews on The Daily Memphian site with lots of candidates
and lots of issues. We’ve done interviews
with Mayor Strickland and Candidate for
Mayor Tami Sawyer. We appreciate both
of y’all being here. Thank you for listening. Join us again next week. [dramatic orchestral music] [acoustic guitar chords]

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