Despite additional cuts to requested funding members of the Carter County Budget Committee are still facing the possibility of a significant tax increase as the county’s Finance Director tells them their choice will be to fund the budget or begin to cut county services.

The outlook for the county’s 2018-19 fiscal year budget remained grim at a Budget Committee meeting on Thursday as Committee members learned additional cuts made by officeholders were not enough to offset a looming tax hike.

Earlier in the week, members of the Committee asked Carter County Finance Director Brad Burke to speak with the officeholders and ask them to cut an additional 10 percent from the non-salary portions of their budget requests. On Thursday, Burke reported back to the Committee that he had spoken with the officeholders, and some made additional cuts to their budget requests.

“Some found areas they could cut, and some said they couldn’t cut it any more,” Burke said.

With the additional cuts, Burke said the county is now facing a 9.03 cent tax increase, instead of the 10.73 cent increase the Committee was looking at on Tuesday. Each penny on the tax rate brings in $83,341 in revenue according to the Finance Department.

One of the officeholders, Mayor Leon Humphrey, spoke to the Committee and presented a reworked budget request for both his office and for the buildings and grounds budget, which he also oversees. Humphrey said he had made cuts to his budget and believes the other office holders should “follow suit” and cut their expenditures.

Humphrey said he had reviewed the budgets for other departments and those budgets contained “substantial reserves” which could be cut.

“If this Mayor can operate on a 2010 budget, the other officeholders can do the same,” Humphrey said.

Humphrey, who was defeated in his re-election bid during the Republican primary on May 1, also issued a warning to members of the Committee.

“I’m here until August. I do have some say in this budget,” Humphrey told the Committee. “There is no way I will allow a tax increase, knowing what I know.”

“If you submit, or the full Commission submits a budget with a tax increase, I will veto it,” Humphrey added.

While Humphrey said he sees “substantial reserves” in the budgets of the other officeholders, Burke said he did not find excess funds in the budget requests.

“I’ve looked over this budget and looked over it,” Burke said. “I don’t see any fluff in it.”

“As I see it, you either have to fund the budget or start sending people home and start cutting services,” Burke added.

Over the years, the county has avoided small tax increases which led to the county digging itself a hole and facing a significant tax increase, according to Deputy Finance Director Michael Kennedy. Because the county tapped into the fund balance last year to balance the budget, as it has done over the past several years, the county started this year’s budget process needing a 5 cent tax increase just to balance the expenditures from last year.

“If Brad says he’s looked at the budget and there’s not a lot of fluff, I don’t know where we’re going to cut it,” Commissioner Ross Garland said. “Nobody really wants to raise taxes. We’re going to continue to put ourselves in a corner and make it harder to get out of. Instead of looking at 10 cents this year, we’d be looking at 20 cents next year.”

Budget Committee Chairwoman Sonja Culler also addressed the county’s habit of dipping into the fund balance in order to balance the budget.

“I can’t help but think we are punishing the officeholders for things the Commission has done,” Culler said. “It’s our fault and the Commissions before us. We’re asking the officeholders to make cuts to clean up our mess.”

Commissioner John Lewis proposed the county avoid a tax increase this year by pulling money from the fund balance to make up for the shortfall in revenue.

“We could take $1 million out of the fund balance,” Lewis said. “That way everyone gets what they need and no one gets a tax increase.”

Lewis turned that into a motion, to set the budget at last year’s funding levels and take money out of the fund balance to cover the expenditures.

Several members of the committee responded that tapping the fund balance in order to balance the budget was what created the hole the county now finds itself in.

“I contest that motion because it goes against our policy and procedures,” Commissioner Isaiah Grindstaff said. “We have a policy that requires us to have a balanced budget.”

In January, the Commission adopted a policy that requires the Commission to balance the budget for the fiscal year without using money from the fund balance.

The committee referred the matter to County Attorney Josh Hardin, who said the full Commission could vote to override the rule and pass such a budget, but it would require a two-thirds majority vote by the Commission to suspend the balanced budget policy.

The committee voted on the challenge, which killed Lewis’ motion by a vote of 6-2. Commissioners Grindstaff, Culler, Garland, Mike Hill, Kelly Collins, and Dr. Robert Acuff voted in support of the challenge. Lewis and Commissioner Ronnie Trivett, who had provided the second for Lewis’ motion, voted against the challenge.

During a discussion on making additional cuts, Collins made a motion to cut 5 percent from the non-salary portions of the department budgets for any department which had not previously cut 5 percent or more. Acuff provided the second for the motion, but it failed on a vote of 2-6, with Collins and Acuff being the only committee members to cast affirmative votes.

The committee made no decisions during Thursday’s meeting but asked Burke and Kennedy to review some questions regarding funding and cuts and bring those numbers to the committee’s next meeting on Tuesday, May 29, at 6 p.m.