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John Thompson

Elizabethton Bureau Chief
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Budget Committee votes to recommend property tax increase in Carter County

June 27th, 2013 9:57 pm by John Thompson

Budget Committee votes to recommend property tax increase in Carter County

ELIZABETHTON — After nearly two hours of debate, the Budget Committee of the Carter County Commission achieved some consensus Thursday night. By a 6-1 vote, with one member absent, the committee voted to recommend a property tax increase for the General Fund of 8.5 cents.

County Finance Director Ingrid Deloach said that increase, combined with a 5 percent budget cut on all county offices funded by the General Fund from the 2012-13 would result in a balanced General Fund.  Deloach said the budget cut applies even to those departments, such as the sheriff’s department and jail that the Budget Committee had previously voted to increase.

The committee had voted in May to increase the property tax rate for Debt Service by 15 cents. Committee Chairman Harry Sisk said that increase would also be re-examined. There were some votes taken that were narrowly defeated that would have made the increase in Debt Service only 10 cents.

As it stands now, the committee is recommending a 23.5 cents tax increase. If that were passed by the County Commission, the county’s property tax rate would go from $2.15 per $100 of assessed value to $2.385. The committee will meet again Tuesday.

Deloach strongly recommended money should be put into Debt Service this year. For the past two years, the county has used reserves from Debt Service to balance the budget without raising taxes. She said former Finance Director Jerome Kitchens had convinced commissioners to put additional funding in Debt Service in order to make it easier for the county to pay for the cost of building a new school.

Deloach said two years ago there was $6 million in reserves in Debt Service, but after $2 million of reserves were used in each of the past two years to balance the budget, she worried the reserve might be depleted before the final payout for the bonds on Cloudland Elementary School and the animal shelter will be paid off two years from now.

“We have $4.8 million in the Debt Service now. If we don’t put a penny in the fund this year we will be down to $2.7 million next year.” She had originally called for 20 cents to be added to the tax rate for Debt Service to stabilize it.

She said the reserves would be needed if there were another natural disaster like the 1998 flood of the Doe River.

There were some suggestions that the county should raise property taxes over two years, balancing the General Fund this year and waiting a year to balance the Debt Service.

Prior to the final successful vote, the committee had passed an earlier motion that would have set the General Fund increase at 17 cents. While that measure was approved, when added with the May approval of 15 cents for Debt Service, there was not a majority on the committee for a $2.47 tax rate

Committee member Nancy Brown said many people could not afford a tax increase.

“There are a lot of people unemployed right now and there are a lot of unemployed who are not counted because they fall through the cracks,” Brown said.

Committee member Thomas “Yogi” Bowers said the committee was having trouble getting a consistent majority. “You don’t have a majority to cut services and you don’t have a majority to raise taxes. I don’t know what to do.”

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