To no one's real surprise the Hamblen County Commission voted for a general government (General Fund) budget that is about $460,000 in the red yesterday. This is a deficit budget-- where the county starts the year expecting to spend about $460,000 more than it takes in. Spending more than you take in is not a good idea for a family budget. It's not a good idea for a government budget either.
This will be played as a "no new taxes" vote. Your property tax bill in October, however, may show that you owe more taxes than you did last year. Why? Because your property's assessed value likely went up. When the property tax rate goes up or when the assessed value of the property goes up, the property tax dollars you pay to the county go up. So when you hear "no tax increase" in the press, don't assume that you will be paying the same amount of taxes as last year.
The real significance of yesterday's vote? It is an admission that most commissioners can't or won't balance the county budget. Most commissioners are willing to use one-time money (pulling down the county's rainy day fund balance once again) to pay for recurring county expenses--an economic practice that eventually leads to bankruptcy.
Did we have a way to avoid a deficit budget in 2006 without raising the tax rate? Yes, we did.
At yesterday's meeting, I put forth the only balanced budget proposal for the General Fund that was made during the entire budget process. It was not rocket science. It was just a matter of returning the wheel tax revenues more in line with the split that was used in 1999 when the wheel tax was first enacted "to build up the general fund." In 1999, the $27 wheel tax was split into $23 for the General Fund and $4 for the School Fund. Over time the split changed with less and less going to the General Fund. With each change in the split, the General Fund got in worse shape and eventually reached an all-time low in 2003.
My proposal was simple. We could balance the General Fund budget by changing the $27 wheel tax split so that $21 would go to the General Fund and $6 would go to the schools. With this proposal, the General Fund was balanced (no pulling from fund balance, no using one-time money for recurring expenses, no simply postponing a tax hike), and the schools would receive $2.4 million in new additional funding for the 2005-2006 school year.
Tom Lowe, a staunch opponent of deficit spending, seconded my motion. It went to a vote and was defeated 12-2. Tom and I were the only supporters of the balanced budget proposal.
Although Commissioners Bruce and Osborne and a few others said they didn't like the deficit budget that was before them, they offered no alternative. If you grew up in the 60s, it reminded you of the line from Hee-Haw, "If it weren't for bad luck, I'd have no luck at all." Only this time it would be, "If it weren't for a bad budget, we'd have no budget at all."
Other commissioners sat virtually silent during the whole process--no idea, no comment, no proposal.
Apparently after spending many hours over many months on a deficit budget, no one was willing to propose spending cuts, no one was willing to propose a tax rate increase, and no one had a proposal for a balanced budget--except for my balanced budget proposal mentioned above.
The silence and the lack of alternatives reminded me of a quote from Albert Einstein, "Don't expect the people who got you into a mess to get you out of it."
FYI: In my August 3, 2005 post, I spoke of the proposed General Fund deficit of $760,000. Things got changed around yesterday as the actual budget vote was taken. Yesterday, the General Fund ended up with a $460,000 deficit and the $300,000 that was originally going to be part of the General Fund deficit was instead taken out of the debt fund.