No WhiteWash!

The City of Kingsport, Tennessee voted to give the owner of the Fort Henry mall up to five million dollars in tax breaks.  Aldermen Marsh and Shull voted against giving a tax break to Somera Capital Management, and Vice Mayor Mallicote, Aldermen Munsey, Joh, Shupe as usual voted with Mayor Phillips to give away the taxpayers money.  Aldermen Shull made the point that the city is showing preferential treatment to the mall owner and was not fair to the current business owners in Kingsport who will be competing with the mall.

Aldermen Joh made a statement that this mall project was needed and that she was a big shopper and she did more shopping than the entire BMA put together.  Aldermen Joh, it’s nice that you have the money to shop, but there are many in Kingsport that are not in the same financial situation as you.

This Board of Mayor and Aldermen will go down in history as the Big Spenders of taxpayers money, at a time when unemployment in Kingsport is very high, high cost of gas and food, foreclosures, higher water and sewer rates and higher cost of city services.

Alderman Joh stated that you need to give tax breaks to get companies to come to Kingsport.  It make me wonder what is wrong with Kingsport in that you have to offer a tax break (bribe) to get them to relocate here.  Somera Capital purchased the mall outright, and I am sure that they had plans on what they wanted to do with the mall at that time.  Later, they approached the city of Kingsport to see what they could get in tax breaks.  My point is that the planned renovations would have happened with or without the tax break.

Somera Capital Management with it’s vast portfolio of properties is managed by General Growth Properties. General Growth Properties manages over 200 regional shopping malls.

Mayor Phillips should publish his email address so General Growth Properties can thank him for the gift of taxpayers money or to request more money.  A little birdie told me that they would like his email address.

See the following posts on this subject

Mall operator seeks city’s help for renovation project

Town Center owners outline plans for mall

Government Should Do Less to Make Tennessee More Business-Friendly

On June 3, 2008 the Kingsport, Tennessee 2008-2009 budget was discussed and voted on. This was the first reading and the final vote is on June 17, 2008   It appears that the City of Kingsport did not reduce the spending and in fact increased it.  The budget has the usual pet pork spending and they are not going to raise taxes.  But, they have a secret tax for the citizens by raising the sewer rate 2.8 percent for city residents and 8 percent for county.  They will also raise the water rates for the county 3.5 percent.  Last year, they imposed the secret tax and received about $700,000.

Mayor Phillips, Vice Mayor Mallicote, Aldermen Joh, Shupe, Munsey voted for the proposed budget while Aldermen Marsh and Shull voted in opposition.

There was a front page article in the Kingsport Times-News.   It basically said that two aldermen objected to the budget and that there would not be a tax increase.  There was not significant coverage by the local newspaper for an important subject as this, but I am not surprised by the lack of coverage.

Alderman Marsh stated he could not vote in approval for the 2008-2009 budget.  He said the city is spending 2% more, nine more people added and it was business as usual.   He also stated that city employees are receiving 25% (including benefits) more over the last three years.  City Manager, John Campbell said that was not true and it was more like 15%.  Alderman Marsh stated that he was using Campbell numbers.

Alderman Shull read a prepared statement expressing his opposition to the budget.  He did state that the average pay for Kingsport citizens was around $35,000 per year and the city manager with the this budget would be making $200,000. He stated that the city manager’s pay should be capped at $137,000.  More information is needed on the city manager’s pay, but I did find the following the budget information.  “City Manager will receive 2% pay plan increase, The performance bonus and a 2% pay adjustment effective July 1, 2008″

Vice Mayor Mallicote began to discount what Alderman Shull and Alderman Marsh stated.  He said he did not believe all of the doom and gloom and he was more optimistic about the economy in Kingsport.  In my opinion he needs to open his eyes.  He stated that building permits are up when in fact they are down 45%

Alderman Valerie Joh boasted that she knew more about real estate than any one else on the BMA since she is the owner of Blue Ridge Properties, a real estate firm.  She stated that her real estate business is doing great.  That is great that her business is doing great, but what about the foreclosures in the area, gas prices, food prices, plant closings, less sales tax dollars coming in, etc.?

Alderman Shupe did not state his position on the budget, nor did I expect him to.  He almost never speaks up to take a position and usually votes with the majority.  It may be that he is intimidated by the other members of the BMA.  He brought up that Alderman Munsey was a former Treasure at Eastman Chemical and asked what Alderman Munsey comments were on the budget.

Alderman Munsey, with the lead in by Alderman Shupe began to read a letter concerning the A1 bond rating from Moody’s.  He was saying that Kingsport is in good shape to borrow more money based on the A1 rating from Moody’s.  As I understand it Moody’s Investors Service interviewed many people in the City of Kingsport government and I am sure they presented a rosy picture.  But, did anyone tell Moody’s that what Kingsport gave away to get some of this so called growth.  An example would be the $18 million tax break for Eastman Chemical.   Alderman Munsey has stated in the past that  “Debt is neither good or bad,”  Alderman Shull asked Munsey why Kingsport did not have a better bond rating and were there higher ratings?   (Note: Moody’s Aaa, Aa1, Aa2, and Aa3 are higher bond ratings than the A1 Kingsport currently has.  Sullivan County has a Aa3 bond rating.)

Mayor Phillips then stated that he was shutting the debate down.  Too bad, because I really wanted to see if Alderman Shupe had anything to say about the budget.  I was shocked to hear the mayor state that if the taxpayers wanted the city to cut the spending, then they could collect garbage every other week.  With this statement, the mayor is willing to cut services to the citizens, but unwilling to cut spending in other areas.

Based on past votes by members of the BMA, some on the BMA will carry the label as BIG SPENDERS.