MEMPHIS, Tenn. — A hearing is scheduled Wednesday in a lawsuit filed by a majority-Black Tennessee town located near the site of a planned Ford pickup truck factory as it tries to fight off a state takeover of its finances.
The town of Mason has sued the Tennessee Comptroller of the Treasury, which announced March 17 that it was taking over the finances of the town located about 40 miles northeast of Memphis. The lawsuit claims the state is taking steps in Mason it has not taken in other counties or cities that are not majority Black.
"We want the Comptroller to give [Mason] an opportunity to put together a plan that is corrective, not punitive, run by elected officials representing the people and not the state," said Attorney Terry Clayton, who submitted the lawsuit on behalf of Mason alongside NAACP representatives.
"The Comptroller is seemingly correcting problems that don't exist"
Tennessee Comptroller Jason Mumpower said the town has experienced 20 years of financial mismanagement. The comptroller is permitted under state law to direct Mason’s financial affairs, including the review and approval of all spending involving taxpayer or ratepayer money, his office has said.
The takeover attempt came after Mason’s Board of Mayor and Aldermen refused to surrender its charter. Days after the takeover was announced, Mumpower said the state of Tennessee could scale back its financial oversight if Mason meets certain goals by this summer.
Census data showed Mason’s population at about 1,330. But the population has fallen to about 794 people after the recent closure of a prison, the comptroller’s office said.
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However, Clayton said that town officials have taken steps to correct the financial problems of previous administrations, correcting late audits and repaying debt from as far back as 2011. The current town administration, led by Mayor Emmit Gooden, was elected in 2018.
"Mason received $227,000 in funds from the American Rescue Plan, and they decided to use every dollar of that money towards paying off their debt," Clayton said. "Why does [the Comptroller's Office] have their foot on [Mason's] neck with the issue of paying back debt, instead of working with them?"
Mason claims it would have trouble making payroll and hiring and retaining law enforcement officers under Comptroller oversight. Mason is working to repay debts, and it has proposed measures allowing it to repay its debts within 27 months, the lawsuit said.
"The Comptroller is seemingly correcting problems that don't exist," Clayton said.
The Tennessee Black Caucus of State Legislators has met with Mason officials and Mumpower, a white Republican and former member of the state General Assembly. A statement from the caucus questioned why the takeover was happening under Black leadership “and when the city is on the verge of a financial boon.”
The comptroller's office has denied that race was a factor in its takeover efforts.
Located in Tipton County, Mason is not far from the planned, $5.6 billion Ford Blue Oval City project in Haywood County. Ford plans to employ about 5,600 workers at the plant, and construction of the factory will create thousands more jobs.
The plant is expected to bring both small and large businesses to the area, including hotels, restaurants, health care facilities and suppliers for the Ford factory, among others. Real estate values also could increase.
“Everyone knew the impact [Ford] would have on Mason," Clayton said. "The state sees this future infusion of capital for Mason and has swooped in attempting to control it."
In a statement, Ford has said it is aware of the situation. Although it has not been directly involved, Ford said it “reached out to state and local community leaders to express concern and learn more.”
Alleged Double-Standards
The lawsuit also alleges that the Comptroller's office treated the two previous cases of taking over a local municipality's finances very differently than in Mason's case, a majority-Black town led by Black elected officials.
According to the suit, Jellico, Tennessee, which is 93% white, had its finances taken over by the Comptroller's Office in 2013 and 2018 after a city council member stole over $100,000 in public funds. However, the lawsuit claims the Comptroller's Office only gave limited oversight of that city's funds compared to what's being proposed for Mason.
Similarly, Van Buren County, Tennessee, which is 96% white, was taken over in 2020 after what the Comptroller's Office described the county was "in the worst financial condition than any county in [Tennessee]."
Van Buren County was $9 million in debt with only $1,395 remaining in their budget, the lawsuit said. However, the Comptroller did not assert financial approval control over the county's finances, and received an unrestricted loan from the state of roughly $680,000, according to the suit.
The lawsuit calls it "incongruous" that Van Buren County would be granted latitude and support from the Comptroller's Office when Mason would not, even though Mason officials claim to have been successfully paying off debt for the past few years.
Moreover, Mason Vice Mayor Virginia Rivers said that the Comptroller's Office has, "only given demands, not support" since Mumpower announced he's taking over the town's finances on March 17.
Rivers said there has been little communication with the Comptroller's Office without attorneys present since their last meeting in March.
The lawsuit accuses the Comptroller's Office of violating the state law which regulates budget approval at the local and state levels, stating that there is no such provision which allows the Comptroller oversight of every expense above $100, which the Comptroller has expressed as a requirement for Mason.
"I would like to see the city continue to operate how they operate, and be able to actually negotiate a reasonable payment deal with the Comptroller's Office to repay their debt," Clayton said.
The lawsuit seeks to grant Mason a temporary restraining order against the Comptroller's Office that would put the financial takeover on hold, and also have the court decree that the Comptroller's Office would not have authority under state law to approve every expenditure in the town.
"We want to let the state know that we’re taking a stand and we deserve to be treated fairly," said Rivers.
The Comptroller's Office declined to comment on the ongoing litigation.
A hearing is scheduled Wednesday, April 6, at 11 a.m. at the Davidson County Chancery Court.
Read the full text of the lawsuit here.
This story was produced with help from The Associated Press.