After failing three times to set a new property tax rate for FY2027, Shelby County Commissioners put down a marker for $2.71 during the Monday, June 15, meeting.
The proposed rate represents an increase of 2 cents over the current rate of $2.69 per $100 of assessed property value, and 5 cents more than the county’s $2.66 recapture rate.
A recapture rate is the adjusted tax rate following assessment appeals by homeowners. It assesses the real value of property in the county in order to prevent a windfall. Last month, Mayor Lee Harris offered a similar $2.66 rate as a part of his proposed $1.6 billion budget for fiscal year 2027.
“It’s less than a 1% increase over what citizens are paying right now,” said Commissioner Michael Whaley.
The Budget Committee chairman initially proposed the substitute ordinance to kick off the discussion on a new rate. Along with providing enough cash to cover routine operations, the rate also saves enough for unexpected expenses, while factoring in the county’s long-term fiscal outlook.
“It does a few things. One, it makes sure we are able to function day to day and take care of the obligations that we have, but it also makes an intentional effort with the substitute to be able to contribute back to the fund balance,” said Whaley.
The $2.71 is broken down into three buckets. The largest — the general fund — would receive $1.26. Education’s cut would be $1.16. The remaining .29 cents would go toward paying down the county’s debt.
“I understand that it’s still an amount more than zero, but I want to bring us back to the responsibility we have over the county’s finances and the size of the fund balance,” said Whaley. “This past year, we had to take a tax anticipation over the debt service fund to cover our operating expenses.”
A tax anticipation note is a short-term debt security issued by state or local governments to bridge cash flow gaps. Moreover, the same maneuver may be necessary next fall.
“It will be larger and it will be external. When you take an external tax anticipation note, they charge interest. Interest rates are high right now, so the cost of inaction arguably is much, much higher,” said Whaley. “It’s not just the cost of capital to go out for debt. It’s the cost of all of our debt and all of our future debt that could be an issue.”
Whaley’s proposal provides commissioners with an opportunity to revisit the rate at the next committee meeting on June 23. If the proposal had failed to pass its third vote, commissioners would have been required to suspend commission rules for a fourth vote. Still, a higher rate allows commissioners to work down to a more agreeable rate.
However, it failed by a narrow 6-5 margin.
Commissioner Henri Brooks reintroduced the amendment after two other rate proposals — one to maintain the status quo, and the other calling for a $2.72 property tax — but failed to yield a seven-vote majority.
Whaley’s proposal went down better the second time. Commissioners approved the $2.71 rate on a 8-4 vote.
Voting in favor were Chairwoman Shante Avante, Miska Clay-Bibbs, Charlie Caswell, Erika Sugarmon, Justin Szalaj, Britney Thornton, Brooks and Whaley. Commissioners Amber Mills, Brandon Morrison, Mick Wright and David Bradford voted no.
“This is an opportunity to go back to the table and have a little wiggle room,” said Brooks.
Despite the clear majority, the vote fails to reflect satisfaction. Property tax increases are inherently unpopular, particularly in tough economic times. Many families across the political divide are struggling to make ends meet as gas and food prices remain high. It’s an even tougher sell in the more conservative suburbs and rural areas.
“We really need to realize that Shelby County has not grown over the last decade. Raising the property tax rate is going to hurt, not help our working poor. It’s going to hurt housing affordability. It’s going to hurt our ability to attract citizens, and it’s going to hurt those I know all of us want to help,” said Morrison. “We are already a very heavily taxed county.”
The county’s property tax rate has recently fallen, however. Beginning in 2022, the rate remained flat until the commission passed a $2.69 rate last year. The drop followed the 2025 property tax reassessments that saw values rise by as much as 30%.
Still, many chronically underserved communities have not benefited from rising home values — at least not to the degree of affluent neighborhoods.
Commissioners have discussed a “moral budget” to address longstanding disparities. In addition to improving the quality of life, another goal of Caswell’s proposal is a reduction in crime.
“When we talk about getting a return on the investment, it’s about making us safe. It’s about making our neighborhoods safe. It’s about investing in the people that are ending up in this justice system due to the large increase of arrests by the task force,” said Caswell.
Last week, the commission agreed to a $4.93 million settlement with the Shelby County Sheriff’s Office to cover overtime costs, after the SCSO sued in circuit court. The figure was reduced from $18 million. Much of the increased overtime costs were due to ongoing engagement with the Memphis Safe Task Force.
Proponents of the moral budget hope to save its priorities from the chopping block. Before the next meeting, they will be combing through the proposed budget and various amendments to look for ways to trim the budget.
“I think there are some things that can be found, we just have to get there,” said Caswell.
