Variables pressing on Unicoi Co. tax rate
May 20, 2012 at 9:33 AM
ERWIN — Although he said it is too early in the process to speculate what Unicoi County’s property tax rate may be in the 2012-13 fiscal year, Unicoi County Mayor Greg Lynch said a number of factors will come into play in determining the fiscal year’s rate.
Over the past several years, the county’s property tax rate has exhibited an upward trend. The rate for the 2008-09 fiscal year was $2.255 per $100 of assessed property value. In the 2009-10 fiscal year, the rate increased slightly to $2.375. The rate was $2.43 for the 2010-11 fiscal year, and is $2.55 during the 2011-12 fiscal year.
In the 2012-13 fiscal year, a rate increase may come due to several debt service projects undertaken by the county over the past few years, including the refurbishment of the Unicoi County Jail, construction of the Jail Workhouse and, the largest of these projects, construction of the Unicoi County Middle School in 2009. Five cents of the current fiscal year’s property tax rate is going toward paying for the school, which was phased into the county’s debt service schedule, and another 6 cents on the tax rate is needed to pay for its construction.
“Everything in that regard should level out but on the horizon now, our big problem is we have quite a few insurance problems,” Lynch said.
Lynch said the county has recently experienced “heavy claims” in workers’ compensation insurance, for which the county will end up “picking up the tab.” Another concern for county officials is the increasing costs of employee health insurance. At Monday’s meetingoftheUnicoiCountyCommission, commissioners heard from John Manfull, the county’s insurance broker, who advised them the county could anticipate around a 39 percent increase in insurance costs if it opts to remain with its current carrier. Lynch said this increase would represent “well over” $1 million in additional expenditures.
“When you have insurance, especially if you’re a government entity, if what you pay in isn’t more than what you pay out, eventually it will be. Eventually, it’ll catch up with you,” Lynch said.
Because of this, Lynch said county officials intend to further discuss the insurance matter during a work session on June 4. Lynch said Manfull will be present at the meeting to present other options and, in the meantime, will search for other insurance carriers. Lynch said the county, which now pays 100 percent toward employee health benefits, may have to look at changing the structure of its insurance, which would include changes to the manner in which it handles co-pays and deductibles.
The county is exploring the implementation of a wellness program for its employees, as well as discussing how health benefits will be handled for employees who smoke. The county also is encouraging health screenings for its employees to aid in the early detection of illnesses, Lynch said.
“Basically, your insurance depends on how healthy your people are,” Lynch said. “It’s not necessarily that you have something wrong with you. It’s just do you catch it in time to where it can be treated and it doesn’t turn into a catastrophic illness. If it does, while you work here for the county, then the county ends up paying most of the bill one way or the other.”
Another potential expenditure is costs associated with the lawsuit filed earlier this year against the county and the Unicoi County Emergency Communications District by eight former and current 911 dispatchers seeking overtime pay they believe they are owed. Lynch said legal fees associated with this matter will likely find their way into the 2012-13 fiscal year budget.
“That’s something that will come right out of, I guess, the taxpayers’ pockets,” Lynch said. “I mean, it’ll have to be funded from somewhere, and it’s unfortunate. And we don’t know where that total lands.”
As is the case with other counties, Unicoi County’s regular operational costs also are on the rise, Lynch said. Much of this, he said, has to do with increased fuel prices, which will affect offices such as the Unicoi County Sheriff’s Department and the solid waste department due to an increased fuel surcharge for the hauling of waste. County employees, who received a pay raise for the first time in several years this fiscal year, may seek to receive another if employees of the educational system receive raises, Lynch said.
Lynch also said the costs of maintaining programs trimmed or cut by the state may be passed on to counties.
“There’s just certain things in government that people don’t see,” Lynch said. “They think ‘Well, they’re raising my taxes, they must all be getting rich down there.’ And the bottom line is, we’re not.”
However, Lynch said recent industrial growth may help offset some of the county’s expenditures. This includes the ongoing expansion of the Nuclear Fuel Services facility and, Lynch said, Specialty Tires’ property in Unicoi is soon set to be part of the county’s tax roll. Sales tax revenues for the county’s three municipalities have been up 5 to 10 percent this year, Lynch said.
This year also marks a reappraisal year. Through this process, the county will be able to determine what each penny on its property tax rate equates to in dollars. In the 2011-12 fiscal year, a penny represented approximately $30,000. Lynch said the county will possibly learn what a penny on the rate represents around July.
“Of course that’s a real big factor in our tax rate, and if a penny brings more money then that reflects growth,” Lynch said. “I think with the reappraisals, you could assume that there would be some growth.”
At its last meeting, the County Commission passed a resolution enacting a continuing budget and tax rate that will fund county departments and activities at their current levels until the new budget is passed. The fiscal year for counties runs from July 1 to June 30, but Lynch said county officials have their sights set on passing a budget some time in September. He said the county must wait until this time to see what a penny on the property tax rate will represent and to get an idea of the revenues from the prior year.
“With all that being said, I wouldn’t dare speculate on an amount, but it’s going to be a rough year to keep the property tax level,” Lynch said.