So the Plan Didn't Work As Advertised?

It is April and budget season for the local government. In preparation for that I made a series of maps to show why the city and county are having and will continue to have fiscal shortfalls. In today's CA there was an article of a 12% tax increase proposal to pay for money owed to Memphis City Schools. Here's a trip down memory lane of who and what was said in 2008 when the Council cut funding to MCS. Here's another article about the County budget shortfalls. While the immediate budget fight may occupy people's minds another article in the CA this weekend is a little more interesting to me.

But first, lets look at where we are. The city gets about 45% of its revenue from property taxes. How are assessed property tax values doing? Below is a map show the change in assessed property tax values for residential parcels between 2005 and 2010.



While there is a lot of yellow, it doesn't seem that bad on the whole. But these are raw numbers. Not adjusted to inflation. Remember 2005 to 2010 is 5 years. $1 in 2005 is equal to $1.12 in 2010. Now look at the map when it is adjusted for inflation.



A lot more reds and oranges on this map. One of the things that bothers me a lot about our local government is the inability to look at what is happening today or in the recent past and think about what affect that will have in the future. Don't get me wrong, I'm not expecting clairvoyance but there were a few big freight trains heading our way for years and we didn't do anything about it and down right ignored them. Here was the biggest of the trains.



Prior to the nationwide foreclosure crisis that hit in 2008, we had our own foreclosure crisis. Due to the uniqueness of Memphis, we get to be ahead of the curve on things related to economic hardship and poverty. Also because of our demographics we get special attention by unscrupulous businesses that target minorities in predatory ways. Memphis had one of the worse foreclosure rates in the nation by the mid 2000's. It is why Niall Ferguson featured Memphis for his documentary "The Ascent of Money".
In late 2007 and early 2008, a harvard professor came here to film what extreme levels of predatory lending, especially targeting minorities, looked like. Hardly anybody in local government knows who Niall Ferguson is, nobody knew he was in Memphis filming for a documentary seen around the world, and not that many seemed too concerned about predatory and subprime lending to minorities even though it was known to be happening.
While the above chart shows foreclosure notices, a pretty accurate indicator of economic stress on an area, here are what actual foreclosures look like. Do you notice any correlation between the foreclosures and property value?



Lets now look at who lived where all these foreclosures happened. You've probably already guessed.



Local government didn't pay attention to all those minorities getting foreclosed on in the 2003 to 2005. It still didn't in 2006 and 2007 when a lot more lost their homes. Not until it became a national crisis did local government start to even pay attention, even though your primary source of tax revenue is getting gutted like a fish. The families in your community are being uprooted. Neighborhoods are rapidly changing for the worse. Blight and government expenditures related to it are going up. We still haven't even thought through a comprehensive way to come to terms with Blight today.
This all leads me back to the most interesting article in the CA this weekend. It is interesting because it is such crap and indicative of what screwed up priorities local government has had. Amazingly, this article is in the same newspaper that just recently published this article. While much of the rest of the city was going through the ringer, we had to occupy our mental energies/resources on getting another 1,000 young professionals to live downtown between 2000 and 2009. Here was what I wrote about downtown statistics from February 2010. Billions of dollars of investment and unmatched local government effort for two decades promising the rest of the city downtown will save us. Well it didn't. So when is the accountability moment? A lot of these decision makers are still around.