Budget Committee approves 9-cent property tax increase

Published 3:03 pm Wednesday, May 30, 2018

With the Carter County Budget Committee facing what many members felt was a difficult choice between raising taxes or cutting county services, the Committee voted in a split decision Tuesday evening to add 9.03 cents to the property tax rate to balance the budget for the upcoming fiscal year.

In the past couple of months, members of the Budget Committee have put in around 30 hours listening to budget requests and looking for ways to cut expenses for the county. When the budget process began this year, the Committee was looking at a possible property tax increase of 16 cents in order to fund all of the budget requests and mandated spending increases.

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The Committee asked department heads and officeholders to make additional cuts to their budgets, as well as deciding not to allocate funding to some outside service agencies. Those cuts brought the funding shortfall down to needing 9.03 cents to balance the budget.

Carter County Finance Director Brad Burke told members of the Committee on Tuesday that he did not see the county officeholders and departments being able to cut enough from their budgets to cover the shortfall without having to cut employees and services.

Committee Chairwoman Sonja Culler reminded the committee that the county started off the budget process with a shortfall.

“We started out 5 cents in the hole from where we have taken out of the fund balance for the last four or five years,” Culler said.

Commissioner John Lewis noted some of the increase in the budget this year is due to state-mandated raises for elected officials. Lewis said he had spoken with “someone in Rep. Jason Mumpower’s office” (Mumpower is no longer a state representative but works in the Tennessee Comptroller’s Office) who told him that the counties do not have to pay for the state-mandated raises. Lewis said he did not remember the name of the person with whom he had spoken.

Burke, who before accepting the position of Carter County Finance Director worked as an auditor for the Tennessee Comptroller’s Office, said the information Lewis received was incorrect. Burke said the elected official salaries set by the state are the minimum allowable and the county must pay the elected officials at least the minimum salary.

Lewis made a motion for the county to withhold funding for the state-mandated raises, which was seconded by Commissioner Al Meehan.

Meehan asked Burke what would happen if the county decided not to fund the salary increase for the elected officials.

“We would probably get sued,” Burke said.

In addition to a lawsuit, Deputy Finance Director Michael Kennedy said the county could see other repercussions from state officials as well.

“They could withhold some state funding,” Kennedy said. “We don’t know what they would do.”

Commissioner Ross Garland asked Burke if during his experience working with the Comptroller’s Office he had ever seen a county withhold funding from a state-mandated raise for elected officials. Burke said he had never seen that done.

“I don’t think we want to be the first ones to put ourselves in that position,” Garland said.

The motion by Lewis failed on a vote of 2-6 with Lewis and Meehan voting in favor of withholding the funds. Culler, Garland, and Commissioners Buford Peters, Isaiah Grindstaff, Ronnie Trivett, and Kelly Collins voted against the motion.

Culler spoke to the group about the county’s property tax rate, which she said has been “seesawing” for years.

“We’ll drop it down low for a few years and then we have to raise it back up to make up for what we lowered,” Culler said.

Several members of the Committee said they did not want to vote for a property tax increase but did not see any other choice other than to begin to cut services and employees.

“The county is in trouble,” Culler said. “We are going to have to bite the bullet.”

Peters pointed to the county’s balanced budget policy, which was adopted by the full Commission earlier this year, saying it tied the hands of the budget committee in a way.

“We passed the balanced budget amendment,” Peters said. “So this committee really has no choice but to present a balanced budget.”

Meehan told his fellow committee members he feels the county is on “an unsustainable course” because the county does not have enough revenue from the tax base to cover the demand for services.

“The reality is, people face cost of living increases all the time,” Meehan said. “I think we are living in a dream world if we think we can hold the line while providing the county services.”

Meehan made a motion to add the 9.03 cents to the tax rate needed to balance the county budget. The increase would set the property tax rate at  $2.5603 per $100 of assessed property value. Grindstaff provided the second for the motion.

The proposed tax increase passed the Budget Committee by a 5-3 vote. Peters, Meehan, Grindstaff, Garland, and Culler voted in favor of the motion. Trivett, Lewis, and Collins voted against the increase.

The committee also voted on several individual motions to approve portions of the proposed budget.

The full proposed county budget for the 2018-19 fiscal year will be presented at a public hearing on Monday, June 18, at 5 p.m. before the June meeting of the full Commission. The Commission will vote on the proposed budget during their July meeting.