The Memphis City Council and Shelby County Commission each passed their respective budgets for Fiscal Year 2026 (FY26) in the past couple of weeks. We have a lot to cover, so let’s get into it:
What’s in the Memphis Budget?
The city’s FY26 operating budget passed through the Memphis City Council on June 10th, with 20 days to spare before the end of FY25. Here are a few of the highlights from the discussions and final budget:
Following last year’s city property tax hike of 49 cents per $100 of assessed property value, the council opted this year to refrain from increasing the rate. Instead, the rate was set at the same level as the state-recertified rate of $2.58 for the city of Memphis.
A 3% raise for most city employees passed in the final budget, superseding a previously passed 5% increase, for which there was little to no room in the budget. Councilwoman Pearl Walker proposed the compromise, which passed on an 8-2 vote in the council. This also allowed for some revenue to be allocated to the city’s “rainy day” fund, which city finance officials assert has been dangerously underfunded as of late.
Councilmembers added an estimated $12 million to the city’s expected revenue for the upcoming fiscal year, which will come in the form of taxes on the properties owned by xAI. Mayor Young left this estimated revenue off of his proposed budget due to uncertainty around the exact amount which will be generated, opting instead to look forward to unexpected revenue throughout the year.
The added revenue in the budget will, in part, go toward funding priorities included in the finalized legislation, such as the aforementioned $1.5 million to expand Pre-K for All (which is individually up for final approval in July).
What’s in the Shelby County Budget?
A marathon session in the Shelby County Commission on Monday led to a final budget which includes several notable line items:
Just like their counterparts in the city council, the Shelby County Commission ultimately voted to keep the county property tax level at the state-recertified rate, which is $2.69 for the county. This followed extended discussions that included multiple proposals for increases ranging from three to nine cents to fund priorities such as Pre-K for All, as well as vehement opposition to any level of increase from several members. There was even a proposal to cut the rate by six cents, which was quickly rejected, as it would have resulted in an unbalanced budget, running afoul of state law.
Commissioner Mick Wright came to the discussion with a proposal that included $21 million in savings, which he claimed existed due to discrepancies between the proposed budgets of certain departments and the average actual expenditures from recent fiscal years. Commissioner Ford added onto this with his own amendment, raising the savings level to $28 million.
Though $28 million fell short of the $120 million necessary to fund all of the priorities passed by the commission during committees last week, the commission came to a compromise and funded several important items. These include:
$2 million to expand Pre-K for All
Partial funding for a crime lab in Shelby County
Funding for the Memphis Zoo to provide free admission on Tuesdays
$1 million to the Hospitality Hub for services for people experiencing homelessness
Funding to achieve pay parity for employees of the District Attorney’s office
The “More For Memphis” Lens:
A government’s operating budget is essentially a message to the people about their leaders’ priorities. Though Memphis and Shelby County residents have been told to brace for lean budgets and tough decisions for this fiscal year, we believe that our leaders were able to deliver several exciting items that closely align with our work in the More For Memphis strategic plan to improve economic mobility for children and families. From an incredible commitment to funding Pre-K for All, to ensuring access to community spaces for families, to multiple initiatives aimed at reducing crime and alleviating pay disparities, our leaders stepped up this year with a promise of more to come. Looking forward to next year, the city budget should not be as tight as this fiscal year, with additional anticipated revenue in the form of debt servicing. Opportunities abound for us to continue to work with city and county leaders to achieve the goals of More For Memphis in the areas of Arts & Culture, Community Development, Economic Development, Education & Youth Development, Health & Wellbeing, and Justice & Safety.
