Brian Collins, City of Memphis finance director (Karen Pulfer Focht/The Commercial Appeal files)

By Ryan Poe of The Commercial Appeal

Facing an estimated loss of nearly $80 million in tax revenue, Memphis Mayor Jim Strickland called Thursday for lawmakers to drop a bill that would allow parts of the city to de-annex themselves, and outlined grim consequences that could include higher taxes and forced city-county consolidation.

Strickland said at a media briefing in City Hall that he would meet legislators Wednesday in Nashville to discuss the bill, which would allow areas annexed since 1998 in six cities, including Memphis, to vote as early as November to de-annex themselves from the city. The bill is on the House of Representatives' agenda for Monday.

"There is without a doubt that this bill is the highest priority on our legislative agenda now," he said. "The effects on the city of Memphis and the surrounding areas could be devastating."

One of the effects, he said, in response to a reporter's question, could be forced consolidation, a divisive debate in the county for decades.

"I don't want to get to that point this way," Strickland said of a forced consolidation. "I'm really hoping this bill fails, and we don't have to get to those discussions because our community does not need the turmoil that this bill and the resulting debate would have."

The routine route to consolidation requires dual approvals -- by city voters and separately by those in unincorporated pockets of the county outside of Memphis. The referendum routinely fails outside the city, the last time in 2010 when 85 percent of the unincorporated voters opposed consolidation. With estimates of more than 100,000 additional residents in potential de-annexation areas, that would mean that many more people in unincorporated Shelby County opposing the idea.

A December, 2015 ruling by the U.S. Sixth Circuit Court of Appeals upheld a lower court's dismissal of a lawsuit challenging the dual vote.

There are other reasons consolidation could be a tricky path for the city. A 2002 Attorney General's opinion said the city can't surrender its charter — by either a referendum or City Council vote — until the General Assembly approves a process for the abolition of home-rule city charters.

"I think there's some legal angles to that. It's not as simple as the (city) council voting to surrender its charter," said Shelby County Mayor Mark Luttrell.

But there are other ways, according to Bruce McMullen, the city's chief legal officer.

"The attorney general's opinion lists three different qualifiers before it gives an answer to a closed-universe question," he said in a prepared statement. "It does not contemplate the myriad of possibilities that could take place with an unprecedented mass de-annexation."

County Commissioner David Reaves said talk of forced consolidation is simply "fearmongering" and if it happens, could start a very different chain of events.

A de-annexed South Cordova, along with the suburban municipalities, would have the necessary size to begin the process of creating a new county and separate from Shelby County, Reaves said.

"My thought is if Memphis pulled that trigger, they'd pull the trigger to form a new county," he said. "There's moves and countermoves."

Brian Collins, city chief financial officer, said large-scale de-annexations would cripple the city's budget beginning in 2017. He pointed out the irony of the idea that people leaving the city could lead to a merger of the city and county.

"How can that not be part of the set of possible outcomes?" Collins said of consolidation. "If the core of the region continues to deteriorate — there's no future in that."

In Memphis, the bill applies to 10 neighborhoods, including Hickory Hill, South Cordova, and the Southwind-Windyke area. If all 10 areas de-annex, Collins said the ensuing crisis would "eclipse" all of the others he's seen, and Memphis could lose up to $63.8 million in property taxes and between $15 million and $30 million in sales taxes. Together, that's roughly 12 percent of the city's $650 million operating budget.

Collins said the threat of the de-annexations wouldn't change the budget presented in mid-April, but the city could see higher taxes and delays in paying its full annual required pension contribution, which can range from $58 million to $80 million.

Strickland, who unveiled his concerns about the de-annexation bill's impacts Wednesday, said he isn't opposed to shrinking the city's footprint, but first wants to carefully study how the move would impact the city and region.

Collins said de-annexing all of the eligible areas would remove 111,228 citizens from the city's population, giving the statistical impression that Memphis is dramatically losing population and potentially scaring away economic development.

"Who wants to move to a dying city?" he said.

The county has formed a team to craft a "visionary plan" if de-annexations take place, Luttrell said. There are parks, streetlights, community centers, roads to consider and citizens might have to compensate the city for some improvements.

"There's still a lot of details in this whole de-annexation plan that must be researched" he said. "We, as public officials, have a responsibility to educate the public before they vote on it, and if that's what they decide, it's what we will do."