Memphis CFO warns of $14 million shortfall, urges hiring freeze and overtime cuts

Walter Person, chief financial officer for the City of Memphis, told the Budget Committee on May 5 that the city is facing a tighter fiscal year than expected and “we're looking at about a $14,000,000 gap right now as we sit today.” The shortfall reflects slower state-shared and local sales-tax receipts, lagging collections on a doubled vehicle-registration fee and a series of FY24 and FY25 expenses that reduced fund balance.

The gap follows a year in which the city recorded an almost $74 million impact to fund balance after FY24 close and then adopted steps last year — including a 49-cent property tax increase and a higher vehicle-registration fee — that together were expected to add roughly $90.3 million to revenues. Person said the administration now projects a tighter picture, leaving the city to consider near-term measures to avoid starting FY26 in a deficit position.

Person described the main revenue and cost drivers that produced the situation. On revenues, he cited declines…