July 19, 2005 Tiptoe around the Taxes

Good news: Two of the tax whammies (see post of July 16) may have been avoided.
Bad news: The county passed a budget for its general government fund that is $760,000 in the red.

Hamblen County Commission's Budget Committee met. Commissioner Phillips proposed a plan to give the schools local property tax growth of about $500,000 and to "predict" and budget local sales tax growth of about $700,000. Net result is about a $1.2 million increase in local school spending on top of the $1.6 million increase in state BEP funding. This passed in committee 7-6. Commissioner Ricky Bruce was absent. This still must go to full Commission on July 21 for approval.

Then Herbert Harville, copying an idea from a Knox County School Board member, proposed to pull $300,000 out of the county's general government revenue and put this part of the county's revenue into school revenue. Harville's surprise maneuver, taking county government revenue and placing it into school revenue, passed with only a handful of "no" votes.

The county's general government fund was $460,000 in the red when we walked in to start our meeting. After Harville's proposal passed to take an additional $300,000 away from the county's general government fund (that is for law enforcement, county court clerk, veterans service officer, court, planning commission, etc.), the county's general fund budget was suddenly $760,000 in the red.

Harville is an ex-superintendent of schools and his son Stan is the principal at Witt Elementary. Harville is good with numbers, so he knew full well that his plan would put the government's general fund even deeper in the red. That apparently didn't matter to him. He supported a deficit budget spending plan for the county--a plan that is $760,000 in the red. It passed. I voted "no."

The previous Commission tricked voters into voting the 'temporary' wheel tax permanent via Briggs' "pick your poison" statement in April 2002. The previous Commission, eight of whom still serve on the currenet Commission, then went back on their "pick" statement and gave the voters a second dose of poison, voting in August 2002 to go ahead and enact a $0.15 property tax increase on top of the wheel tax extension. In 03-04, the new Commission enacted a $0.21 property tax increase on the outside garbage rate to rescue a garbage fund that was "broke." Then there was a litigation tax increase. And during this time (02-04) the Commission twice took money out of the debt fund, transferred about $700,000 to the general fund, and spent it.

Question: How can you make the wheel tax permanent (about $1.4 million in revenue), enact a $0.15 countywide property tax increase (about $1.5 million in revenue), enact a $0.21 garbage property tax increase (about $700,000 in revenue), raise litigation taxes, and then move about $700,000 into the general fund from the debt fund and still find yourself with a $760,000 deficit budget? More and more tax money has been raised, but we still find ourselves saying it isn't enough.

Maybe revenues will be better than expected. Maybe expenditures will end up less than expected. Maybe we'll be OK.

No one wanted to look for cuts. Commissioner Phillips said she had called county offices, and no one could cut anything other than a little here and there. Commissioner Osborne said our processes and accounting are so poor that it would be useless to look for any savings anywhere. I agree that our processes and accounting are poor--we know this from our audits and from the deafening silence from our "chief financial officer," County Mayor David Purkey, who insists on keeping two sets of financial numbers but who won't tell our audit committee why he moved $360,000 around from fund to fund in 2004 without authorization from county commission. I do not agree with Osborne or Phillips that it would be useless to look for every saving there is--big or small.

I noted again Commissioner Spoone's remarks that in all his 20+ years on Commission, he had never seen Commission accept all budgets without a cut. I suggested that a committee of up to 3 commissioners be appointed to examine the budget closely, talk to department heads, and report back with any savings. That didn't go to a vote.

Harville and several commissioners won't even talk about or look for cuts. Instead, they voted to put the general fund deeper into debt than it was when we walked into the meeting.


Lots more to come about how we got here...