State Comptroller Spells Out Memphis Budget Requirements

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(Memphis) Tennessee Comptroller of the Treasury Justin Wilson said his threat to the Memphis City Council in a letter Wednesday is real.

“I believe the city council will deal with the issues. I would be very surprised if they do not. This is their responsibility and I believe they will meet their responsibilities,” said Wilson by phone from Nashville Thursday.

Wilson wrote a letter to Memphis City Council Chairman Edmund Ford Jr. Thursday after Ford asked for direction as the council drafts a final budget.

“Does the comptroller have the authority to direct the tax rate? Yes it does. Does it have the authority to change estimates in the budget? Yes he does. Does he have the authority to strike items from the budget? Yes he does,” said Wilson.

Wilson said in recent years the state has not had to take over city finances, but they have issued warnings - like the one Memphis has received - to other cities. Wilson would not say which cities those were, but did say they are much smaller than Memphis and in worse shape.

Wilson said in his letter Wednesday that “the Council should decide the City’s priorities. If the Council does not do this, someone else may end up doing this.”

“Next time they try to borrow money, there could be issues with the rating agencies or with creditors, the courts could be involved and the comptroller has authority,” added Wilson.

Wilson has asked for the city council to come up with a balanced budget that addresses outstanding liabilities like the increasing cost of healthcare and debt service.

“I can’t remember a time when it’s been this dyer and people need to be concerned about this,” said News Channel 3 commentator Otis Sanford Thursday.

Ford said he ran several ideas by Wilson, including restoring the 4.6 percent pay cut from 2011 to city employees.

“I asked him about how other council members may have brought to the table 4.6 percent restoration and other projects that may not have private money attached to them. He strictly but sincerely told me those are not long-term items,” said Ford.

Wilson said he does not want to tell Memphis how to create their budget, but goals to work towards, without “kick[ing] the can down the road.”

“I can’t decide what the priorities are for the city. The city needs to do that for them. I’m not the one to tell the council what they should do or shouldn’t do as long as they have a balanced budget,” said Wilson.

City Council will address the budget again Tuesday, June 18th.