May 29, 2008 Local Newspaper & Sales Tax Referendum: That Was Then, This Is Now

There actually IS a citywide special election on a sales tax referendum, and early voting ends today. Election Day is June 3.

There was a countywide sales tax referendum four months ago (February 5) that failed by a narrow margin.

It is amusing to observe and speculate about the dramatic difference in local newspaper coverage (Citizen Tribune) of the February 5 countywide sales tax increase referendum (THEN) and the current June 3 citywide sales tax increase referendum (NOW).

THEN The local newspaper ran a daily barrage of articles and front-page headlines about the tax increase and/or those who supported it, such as:

"School board supports sales tax increase proposal" January 8, 2008.

"Early birds: Sales tax resolution is the hot ballot item" January 16, 2008.

"Purkey backs the tax" County Mayor David Purkey. January 23, 2008.

"Haun says schools need voters to support tax referendum" School Board Chair Janice Haun. January 24, 2008.

"Turnout low for early voting" January 25, 2008.

"Robinson: Tax increase would be extra income for schools" Chamber of Commerce CEO Thom Robinson. January 25, 2008.

"Ford Says Tax Plan Is Fair" Commissioner Stancil Ford. January 28, 2008.

"Sales tax referendum helps city property owners" City Mayor Sami Barile. January 29, 2008.

"Backing the tax: P-16 discusses importance of referendum" Tish Jones, Andy Smith. February 1, 2008.

NOW How many front-page articles/headlines have appeared so far about early voting, the current sales tax referendum, the "leaders" who support it?

---------------------------------------------------------------

THEN The tactic of hit them on the head with pro-tax articles didn't do the trick.

NOW The tactic has changed. The current election, as a previous post noted, looks more like a stealth operation.

Don't say anything (or as little as possible) on the front-page. Just network behind-the scenes and make sure that the loyal supporters of every tax increase and those who will benefit the most by the temporary property tax rollback carrot come out. Follow the money--who benefits the most and who loses.

The City keeps saying that out-of-town shoppers will help pay for the operation of city government through the sales tax increase.

What about the price of gas? What about the new stores opening in adjacent towns? How many out-of-town people will travel to a Lowe's/Walmart in Morristown when there is a Lowe's/Walmart in their own hometown? Who will be stuck making up for the loss of "out-of-town shoppers" sales tax revenue when there is a drop in budgeted sales tax revenue? Taxpayers of Morristown.

The real long-term solution would be to live within a budget--a budget that is limited to necessary government services procured and performed in a professional manner---without $100 million wish lists, chrome everywhere, overruns, no-bid agreements, and interest-only debt payments that simply pass the debt and continuing interest to the next generation!

FYI: The City taxpayers will have to pay about $8,000 for the costs of holding this special election because this is a special election that the City requested to be set on a date when no other regular election was already scheduled.

Of course, City taxpayers will be footing the bill--which they also did during the last referendum--for the current "City of Morristown" political campaign committee and its electioneering letters, etc. supporting the sales tax increase.

May 27, 2008 Mayor Barile Appoints Support Tax Increase Committee

The City of Morristown has formed a committee to support the sales tax increase in the current referendum.

The name of the committee is "City of Morristown." Click on the image for all the details.

Mayor Sami Barile appointed City Finance Director Dynise Robertson as treasurer of this "City of Morristown" Committee.

The treasurer's address is the Morristown City Center! The treasurer's phone number is 581-0100--the same phone number for the City of Morristown!

If you are a Morristown property owner, the committee recently sent you a nifty personalized letter--that you paid for--to encourage you to vote YES for a sales tax increase.

Squeezed by soaring costs of gas, milk, food, insurance, utilities? Too bad.

Gotta raise those sales taxes so people pay more taxes on the purchase of basics.

Tax 'em when they earn. Tax 'em when they spend.

Tax 'em, Tax 'em, Tax 'em.

Take their money and then, boom, use those tax dollars to send out letters encouraging a YES vote for even more taxes.

Mr. Ponzi (scheme), the government's going to put you out of business!

UPDATE: Taxing Tennessee has added a post and comment on the "arrogance" of this City taxpayer-funded "propaganda." Thank you to Ben Cunningham, a taxpayer-watchdog!

May 26, 2008 Front Page "News"?

Do you read the truth about government in the newspaper or just a front-page press release?

Is a professional reporter concerned when the financial facts of a front page hard news story may be wrong? Will a reporter who says he "stands by" his article and the audited figures in it show where his "audited" figures came from? Click on the "news" headline and excerpts at left.

The newspaper article, written by Bob Moore, quoted Trustee Bill Brittain and County Mayor David Purkey and provided and compared "audited" expenditure figures for 1997 and 2001.

The article states that the 1997 audited total for the general government, highway, garbage, and general debt was $14.1 million. A review of the audit shows that this total appears to be correct.

The article maintains that spending only went up slightly from 1997 to 2001 and that the 2001 audited total for the general government, highway, garbage, and general debt was $14.8 million. According to an auditor, a review of the audit shows that this total appears to be incorrect.

If you actually look at the 2001 audit, you will find that the expenditures for 2001 are not $14,800,000 as reported. Instead audited expenditures for 2001 are about $16,500,000 (see below). The "news" report somehow left off about $1,700,000 of county spending that is shown in the audit!

2001 AUDITED EXPENDITURES

General government fund $9,755,386 (p. 65)
General debt fund 4,048,765 (p. 85)
Highway fund 1,955,371 (p. 71)
Garbage fund 1,812,099 (p. 68)
-----------------
TOTAL OF 4 FUNDS $17,571,621
Less Tax Anticipation $ 1,000,000
Notes for General Fund
and Garbage Fund -----------------

2001 TOTAL AUDITED $16,571,621
EXPENDITURES

The audit shows approximately $16,500,000 in "audited" expenditures in 2001, but the front-page news article reported only $14,800,000 in 2001 "audited" expenditures.

Neither the County Mayor nor Trustee would ever respond to anyone's questions or offer an explanation for the $1,700,000 in spending that is in the audit but that is not in the "news" article. ($16,500,000 AUDIT - $14,800,000 NEWS REPORT)

Since no one would discuss the discrepancies, I called the reporter--Robert (Bobby) Moore--and told him that I had talked to an auditor and it appeared that $16,500,000 was spent in 2001. I then asked Bob if he could explain the $1,700,000 discrepancy in the newspaper report and the actual audit expenditure totals for 2001.

WARNING: If anyone else out there is considering calling Bob Moore to ask a question about an article he has written, be prepared to get nothing except a roundabout response which I paraphrase as follows: "I stand by my article, but, no, I will not answer any questions, I will not look at the actual audit, and I certainly will not tell you whether the figures in my article are really correct or not."

The conversation--paraphrased-- went more or less like this:

Noe: Bob, you reported that $14.8 million was spent (in 2001)...An auditor reviewed the audit with me and says that that is not the case...An auditor says that way more than $14.8 million was spent in 2001. Will you show me in the (2001) audit where $14.8 million was spent?
Moore: I know where it is...I'm not going to tell you...I'm not going to show you.

Noe: Why won't you show me what the expenditures were?
Moore: Because of your blog.

Noe: Bob, I have said either the Tribune was wrong OR they were given false figures. Now you say you know where it is. You know the real expenditures. Where is it (the expenditures that were not reported)?
Moore: I do know. I do know. But I'm not going to tell you. Linda, you don't have a clue. You don't have a clue about how to be a politician.

Bob Moore is a pretty savvy guy with numbers. He could look at the 2001 audit, find the expenditures for each of the four funds, and total them up in just a few minutes--just like the auditor did and just like I did. Because it would be an easy and quick review, I offered to bring him a copy of the 2001 audit. However, he absolutely refused to look at the 2001 audit to see if the figures he had been given and reported were true or not.

On the professional level, Bob Moore is a numbers guy and he writes front-page articles covering city and county government. He can write about whatever he (or his editor) chooses.

A professional reporter, writing a front-page news article that reaches thousands of people, should be willing to explain the facts and figures in his front-page article when asked instead of responding "I'm not going to tell you."

A front-page "news" article is serious business---especially during an election. How many people believed that "news" article and the "audited" figures in it?

Bob Moore says that he "stands by" his article AND the figures. Bob Moore says that he knows where the expenditures that were not reported are, but he can't reveal that information! Super secret and all that. Yeah, sure. It's more likely that Bob got duped and was given bogus figures and now he doesn't want to admit it.

Why can't he show where the figures came from for HIS article? Why won't he look at the 2001 audit and add up the expenditures in the four funds and see if they match what he reported? If he knew that way more than $14.8 million had been spent in 2001, why didn't he report the real amount that was spent and explain what was going on?

Bob loves to talk, but he doesn't want to talk about this article and the "audited" expenditures he reported.

I would like to know if he can (1) show in the audit where there is a total of $14.8 of expenditures in the four funds as he reported; if that doesn't work, (2) I would like for him to explain what he knows about the $1,700,000 of expenditures that are in the audit but that were left out of his report; if that doesn't work either, then (3) I would hope that Bob would simply acknowledge that he was given false figures, reported them, and is not concerned about the accuracy of this or other front-page articles/stories.

Bob makes it sound like he knew all along that 2001 audited expenditures were higher than the $14.8 million that he reported, but for some strange reason he can't or won't reveal why he didn't report the real expenditure total.

If he REALLY knew that way more than $14.8 million had been spent and even knew where it was, why did he write a front-page "news" report saying only $14.8 million had been spent in 2001?

[NOTE: Bob Moore would hate to hear this, but I was not offended and in fact took it as a compliment when he said that I didn't 'have a clue about how to be a politician.' News flash! I never intended or wanted to be a politician!]

We've got more than enough of them in government.

May 26, 2008 Memorial Day

MEMORIAL DAY

Memorial Day, originally called Decoration Day, is a day of remembrance for those who have died in our nation's service.

There are many stories as to its actual beginnings, with over two dozen cities and towns laying claim to being the birthplace of Memorial Day.

There is evidence that organized women's groups in the South were decorating graves before the end of the Civil War. A hymn published in 1867, "Kneel Where Our Loves Are Sleeping," by Nella L. Sweet carried the dedication "To The Ladies of the South Who Are Decorating the Graves of the Confederate Dead."

In May 1966, Waterloo N.Y. was officially declared the birthplace of Memorial Day by President Lyndon Johnson. It is more likely, however, that Memorial Day had many separate beginnings.

Each gathering of people to honor the war dead tapped into the general human need to honor our dead.

Memorial Day is about reconciliation and remembrance as we honor those who gave their all.

A blessed Memorial Day.

May 25, 2008 The City Has Mailed Its Taxpayer-funded Pro-Tax Letters

The Morristown City Council sent letters last week to "Morristown Property Owner."

The letters ask each recipient to vote YES for a sales tax increase in the June 3 referendum.

The letters have individualized property tax information and state that the City Council has "committed" to roll back last year's historic 40-cent property tax increase by 15-cents if the referendum passes. Click on the image at left to view one of the letters.

The letter campaign is part of a mighty effort to cajole a "yes" vote out of a segment of the voting population with no thought about the effect of another sales tax increase on young families, the elderly, and low-income workers--all of whom will be hit hardest with the higher sales tax rate of 9.75%.

The City Council alone votes on property tax increases. The voters, however, have the say on sales tax increases.

Since the Council has to rely on voters to pass a sales tax increase, the City is resorting to extraordinary means--including a temporary partial tax rollback or what some have termed "temporary tax reduction bribery"--to get voter approval of a permanent sales tax increase.

If the Council can get the voters to agree to a sales tax increase, the Council can do the obligatory and temporary 15-cent reduction and then turn right around and vote in future property tax increases without going to the voters as is necessary with the sales tax.

About the only way to get voters to vote themselves a sales tax increase is to frame it in terms of "pick your poison," so that's exactly what the City is doing.

The City administered a 40-cent property tax poison to city taxpayers in 2007. Now the Mayor and City Council are telling city voters that they can substitute a sales tax poison for part (15- cents) of last year's property tax poison by voting YES on the sales tax increase.

Sales taxes are regressive and impact the working poor, the elderly, and those on fixed incomes the hardest.

Sales tax dollars, as pointed out by City Councilman Mel Tucker, are an unreliable, up-and-down source of revenue for the City. The sales tax dollars of outsiders are particularly unreliable because outsiders do not have to come to Morristown to shop.

This referendum offers a short-term carrot (a temporary 15-cent property tax reduction) in order to get voters to approve a long-term and permanent sales tax increase.

The letters are about spending taxpayer dollars to convince property owners that they can benefit by laying a permanent regressive sales tax increase both on themselves and on the working poor, the elderly, and individuals and families who rent.

Look at the people who will benefit by the sales tax/property tax swap.

Then look at the people who are likely to be hurt by the swap--those who own inexpensive housing, those who rent, those who have small fixed incomes, those already suffering with gas at nearly $4/gallon and milk hovering around $5/gallon-- those who already have great difficulty in purchasing the basics of life.

Where is the letter explaining how wonderful it is for these individuals to pay even more sales tax? The government can not tax itself into prosperity, but it certainly can tax its citizenry into oblivion!

May 22, 2008 City Finances: The Truth Is Out There Somewhere

What a difference a year makes in headlines and public statements!

March 2006: No property tax increase. City Administrator Jim Crumley doesn't anticipate an increase in city property taxes to fund day-to-day governmental operations "in the foreseeable future." Mayor Johnson: The city...is on "firm financial footing."

June 2007: Budget finalized with the largest (40 cents) property tax increase in the history of the City of Morristown. 41% increase!

What happened?

Most people figured out two budget basics a long time ago---(1) you can't spend more than you take in and (2) massive debt is a killer.

Morristown and Hamblen County, however, are still coming to grips with these two budget basics and financial reality.

Both the City and County have been accumulating debt and have been making interest-only payments on large amounts of that debt. With interest-only payments, the debt principal doesn't go down and doesn't go away.

The City has about $70 Million of debt. If interest-only payments continue, some of that debt will still be around when the elementary school-age children of current taxpayers become taxpayers themselves. And the county debt, on which interest-only payments have been made for 7-8 years already, will still be around, too.

The financial basics have been around forever. The City has turned a blind eye for years to financial reality and is only now admitting that there is a problem, a "structural hole" of $430,000, in the City budget. And just what is a "structural hole"? Fancy-schmancy budgetese for "you are spending more than you take in."

City grade for Budgeting 101? D- And that's with a very generous curve!

May 19, 2008 250,000 gallons of raw sewage dumped in Cherokee Lake

Power Outage Causes Spill

This was a front-page headline in the Tribune on April 14, 2008.

The "spill" wasn't corn or beans. The spill was untreated sewage---250,000 gallons of raw sewage overflowing into Cherokee Lake from the Morristown wastewater treatment plant.

The sewage overflowed into the lake due to a power outage at the treatment plant caused by a tree that was cut and fell on power lines. The circulating pumps went down as a result of the power outage. When the sewage reached critical mass, it overflowed into the lake.

Just the thought of an overflow and discharge of 250,000 gallons of raw sewage into Cherokee Lake makes you want to, well, puke.

The article by Bob Moore ran on Monday, April 14, 2008. What I found strange was that the article said that power at the wastewater treatment plant was out from 11:10 a.m. to 12:40 p.m. on "Tuesday."

That seems to indicate that this 250,000 gallon "dump" (pun intended) occurred almost a week before it appeared in the newspaper. Did the overflow happen on Tuesday, April 8? Were lake users--particularly those in the vicinity of the treatment plant--informed of the discharge?

Oh, well, the Tennessee Department of Environment and Conservation was not overly concerned. A spokesperson for TDEC was quoted as saying "...we would not expect to see a lingering problem from a one-time event."

Comforting.

May 18, 2008 Sales Tax Vote: All Quiet on the Morristown Front

Yes, there is a citywide sales tax referendum going on. Early voting started last week. Election Day is June 3. The Tribune has been pretty quiet---so far.

There have not been any front-page pictures/headlines/articles quoting all the elected and unelected "leaders" who support the tax. This is quite a contrast to the incessant front-page pro-tax articles/advertisements in the Tribune in the days leading up to the February 5 countywide sales tax referendum that failed.

Maybe the June 3 citywide referendum is going to be a stealth election where the powers-that-be network to make sure that the troops come in and vote for the tax increase, and other than that, mum's the word. Quiet. Don't remind the average taxpayer about the city's June 3 "pick-your-poison" sales tax referendum and early voting.

Bob Moore wrote an article back in March indicating that the City was going to spend $12,000 on this citywide referendum to educate and advocate for passage of the sales tax increase. As of about noon on Thursday, the City had not yet registered with the Hamblen County Election Commission as a "committee" to support the sales tax.

During the last (February 5) referendum, the City of Morristown formed a committee to support the sales tax. This "committee" put up "Vote YES for Sales Tax" signs on city property and at the Courthouse and mailed out letters signed by the City Mayor and all Councilmen encouraging Morristown residents to vote YES for the sales tax increase.

The City donated $3,500.00 tax dollars to this committee. The "committee" spent $3,066.26 of those donated tax dollars to "educate" those voters who might be inclined to vote against a sales tax increase. The City's finance director Dynise Robertson served as treasurer of that committee.

Click on the images above to see the City's donation of $3,500.00 tax dollars to this committee and the itemization of the committee's $3,066.26 in expenditures. [No, I don't know why or who spent tax dollars at an Office Max in Johnson City instead of Office Max in Morristown.]

Most local residents vividly remember the 2002 "pick-your-poison" wheel tax referendum. Tribune headlines provided the education, "Voters Should Pick Poison." (See above). Bob Moore's article quoted the Commission Chair as telling voters it's an "either-or" proposition---either you vote for the wheel tax OR there will be a property tax increase. Voters dutifully "picked" the wheel tax, and County Commission just as dutifully passed a property tax increase just a few short months later.

Now it's the City's turn. They want city voters to "pick" a sales tax increase despite the fact that sales taxes are among the most regressive taxes. They hit everyone, for sure, but they hit the poor and those on fixed incomes the hardest. Despite the disproportionate and heavy burden of sales taxes on the poor, the City spent over $3,000 tax dollars on the last failed sales tax referendum and, according to City Administrator Jim Crumley, the City may spend even more tax dollars ($12,000?) on the current sales tax referendum in order to "educate" voters to vote YES.

The City wants to put the sales tax increase "in-the-revenue-bag" and then property tax increases can resume. Pick one poison (by referendum) and then the property tax poison (that you can't vote on in a referendum) will be just down the road. Just like the county.

The sales tax increase will then be just another eternal tax burden that hits the poor, the elderly, and those on fixed incomes every time they purchase the basic necessities---a loaf of bread, a gallon of milk, shoes, a shirt.

There is already a tremendous sales tax burden (9.5%) on goods purchased in Morristown/ Hamblen County.

Isn't that enough? Aren't people having enough trouble as it is paying for $5/gallon milk, nearly $4/gallon gas, and sky-high food, utility, insurance, and sewer increases?

May 11, 2008 Mother's Day

I received an e-mail from a friend. I forwarded it to others and want to share it as a blog post in honor of mothers everywhere on Mother's Day 2008.

JUST A MOM?

A woman, renewing her driver's license at the County Clerk 's office, was asked by the clerk to state her occupation. She hesitated, uncertain how to classify herself. 'What I mean is,' explained the recorder, 'do you have a job or are you just a ...?'

'Of course I have a job,' snapped the woman. 'I'm a Mom.' 'We don't list 'Mom' as an occupation,
'housewife' covers it,' said the recorder emphatically. I forgot all about her story until one day I found myself in the same situation, this time at our own Town Hall.

The Clerk was obviously a career woman, poised, efficient, and possessed of a high sounding title like, 'Official Interrogator' or 'Town Registrar.' 'What is your occupation?' she probed. What made me say it? I do not know. The words simply popped out. 'I'm a Research Associate in the field of Child Development and Human Relations.'

The clerk paused, ball-point pen frozen in midair, and looked up as though she had not heard right. I repeated the title slowly emphasizing the most significant words. Then I stared with wonder as my pronouncement was written, in bold, black ink on the official questionnaire.

'Might I ask,' said the clerk with new interest,'just what you do in your field?' Coolly, without any trace of fluster in my voice, I heard myself reply, 'I have a continuing program of research, (what mother doesn't) In the laboratory and in the field, (normally I would have said indoors and out).

I'm working on my Masters (first the Lord and then the whole family) and already have four credits (all daughters). Of course, the job is one of the most demanding in the humanities, (any mother care to disagree?) and I often work 14 hours a day (24 is more like it). But the job is more challenging than most run-of-the-mill careers, and the rewards are more of a satisfaction rather than just money.'

There was an increasing note of respect in the clerk's voice as she completed the form, stood up, and personally ushered me to the door.

As I drove into our driveway, buoyed up by my glamorous new career, I was greeted by my lab assistants -- ages 13, 7, and 3. Upstairs I could hear our new experimental model (a 6 month old baby) in the child development program, testing out a new vocal pattern. I felt I had scored a beat on bureaucracy! And I had gone on the official records as someone more distinguished and indispensable to mankind than 'just another Mom.'

Motherhood! What a glorious career! Especially when there's a title on the door. Does this make grandmothers 'Senior Research associates in the field of Child Development and Human Relations' And great grandmothers 'Executive Senior Research Associates?' I think so! I also think it makes Aunts 'Associate Research Assistants.' Please send this to another Mom, Grandmother, Aunt, and other friends you know.

May your troubles be less,
Your blessings be more,
And nothing but happiness come through your door!
AMEN!!

May 6, 2008 Swan Song for the Tennessee Waltz Corruption Investigation

Ben Cunningham at Taxing Tennessee notes that the FBI's Tennessee Waltz corruption investigation is officially over.


The feds ended up 12 for 12.


The list.

May 4, 2008 Hamblen County Audit 2007 Is Available

The most recent audit of Hamblen County Government can be accessed at the State Comptroller's website. If you don't want to maneuver through the Comptroller's website, here is the direct link to the Hamblen County audit.

Good news in one major area.

Hamblen County Government's unreserved General Fund balance is up to just over $2,300,000. This is a major improvement from the unreserved General Fund balance of $83,000 FY 2003. A healthy Fund Balance is extremely important. It is sometimes called the county's "rainy day fund" or "savings account" for emergency needs.

There is a lot of history behind the Fund Balance reaching a low point in 2003 and then gradually increasing over the next four years. Explaining how the county ended up with a dangerously low FY 03 fund balance is simple. The county was spending more than it took in and doing so by pulling from its find balance/savings account.

When I took office on September 1, 2002, the previous commission had already approved the FY 03 budget.

My first major proposal to the new (2002-2006) commission was to have state auditors come in and perform Hamblen County's annual audit. This proposal passed in October 2002.

The reasoning behind this proposal was two-fold. First, the state auditors would charge approximately $13,000 for the annual audits where the private auditors had been charging $31,000. That meant an immediate $18,000/year savings! Over the past five audits (2003-2007) this one change has resulted in a savings of $90,000 to the county.

Second, I felt a fresh set of eyes should go over the books. I had observed that the county had been spending down its fund balance over a 10-year period, and I had also noticed several questionable financial transactions in previous audits.

The state auditors' first audit of Hamblen County involved FY 2003. When the 2003 audit was presented to the audit committee and county commission in the spring of 2004, there were 29 findings of irregularities and/or violations of state law--more than any other county in the state.

In addition to the findings, one of the most distressing revelations in the FY 03 audit was that more money was spent out of the general fund than was taken in (again). This time the problem was so serious that money from other funds and sources had to be dumped into the county's general fund just to keep the general fund afloat and to keep it from being declared officially "broke."

The public was never officially informed of this dire situation because the auditors had allowed the county to switch the money around and close out certain funds and dump that money into the general fund to keep it from ending in the red.

Even with all the dumping of money into the general fund in FY 03, the unreserved/ available general fund balance as of June 30, 2003, was at its lowest point in recent history--a dangerously low $83,000.

That is why I was always pushing to build up the fund balance and to encourage commissioners to think about the long-term consequences of various spending proposals during the four years that I served.

It was a slow 4-year climb out of a low-point of $83,000 (2003) to a fund balance of over $2.3 M (2007). Hopefully, the new commissioners will keep their budgets on an even-keel and maintain healthy fund balances.

Next, a bit of bad news.

After 10 years, nothing has been paid toward the principal of the $40 million debt on the
1998 School Construction bonds. Of course, this is not a surprise for regular readers of this blog.
The 1998 School Construction debt was set up for a lengthy period of "interest-only payments." Now 10 years and many millions of interest-only payments later, the county taxpayers still owe the whole $40 million principal and will still be paying out lots more interest for many more years!

The Audit Committee of the Hamblen County Commission will meet to review the audit.