ELIZABETHTON — The Carter County Commission overrode Mayor Leon Humphrey's veto on Friday morning and approved a property tax rate of $2.33 per $100 of assessed value. That represents an 18 cent increase on the property tax rate over last year.
The vote to override the mayor's veto passed by a 15-6 vote. Commissioners voting against the override were Nancy Brown, Robert Gobble, Scott Sams, Joel Street, Ronnie Trivett, and Charles Von Cannon. Commissioners Charlie Bayless, John Lewis and Gebe Ritchie were absent. A subsequent vote to override the mayor's veto on approving the county budget was also approved by a 14-7 vote, with Commissioner Jo Ann Blankenship joining the opposition.
Two votes were taken on the override of the first veto because Brown pointed out that commissioners who were county employees did not read the disclaimer saying they had a conflict of interest because of their work. Brown said the disclaimers had also not been read before votes were taken last week. The first and second votes were identical.
Prior to the vote, Humphrey addressed the Commission and told them he had several reasons for the veto. The first reason he gave was his interpretation of state law TCA 5-21-111 e 1, which says the Commission may make alterations to any section of the recommended budget except for debt service.
Humphrey said that for the past two years the commission has drawn down reserves in debt service to balance the budget instead of raising property taxes.
Finance Director Ingrid Deloach had argued during the budget-setting process for more funding in debt service to restore some of those reserves. Her arguments led the Budget Committee to increase the debt service section of the property tax rate by 10 cents. When the budget went to the County Commission on July 15, the amount going to Debt Service was reduced from 10 cents to 3 cents.
Humphrey said that was setting up future County Commissions for failure. He said Deloach's projections on the amount needed by Debt Service if more money were not added were for a 23.5 cent increase just to break even in 2015-16.
"It is very possible you will see a property tax rate of $2.75 or $3.00," Humprhey said.
County Attorney Keith Bowers Jr. had a different interpretation on the law.
"On first blush, it appears the mayor has a point," Bowers said. He said he conducted a search of case law on the statute and found none and no attorney general opinion on the point.
He said his interpretation was that the state legislature intended for the counties to place enough tax revenue in debt service to satisfy its legal obligations on bonds and loans. Bowers said he was not disputing the need to keep additional revenue in the fund, but he said the proposed budget met the requirement of the law.
A second point Bowers made was that he did not think the state legislature intended for the Budget Committee's recommendation for debt service to bind the entire County Commission.
"I don't think the state legislature intended to give the Budget Committee that much power," Bowers said. "There has to be a final decision maker and that final decision maker is you," Bowers told the Commission.
Responding to a question from Commissioner Von Cannon, Bowers said he would welcome an opinion from the state attorney general, but he said it would take months to get that opinion.
A second reason Humphrey gave for his veto was that he thought there could have been more cuts made in the county budget that would have reduced the tax rate.
Humphrey said he applauded the Commission's decision to cut 5 percent from most county offices in the General Fund, but he said that more could have been cut.
He said the $280,000 that was cut represented only 24 percent of the funds that were turned back in at the end of the fiscal year. He said there was another $900,000 that could have been cut. He called for the next budget cycle to begin immediately with each office holder appearing before the Budget Committee to justify each line of the office's budget.
Humphrey also said the school system reported $2.3 million in cuts over the past two years, but said the bottom line in the School Fund was $39 million. He said that represents a $270,000 increase over last year.
Deloach said the school system's increase was because it absorbed several large expenditures instead of going back to the Commission to request more funding. These included a 6 to 7 percent increase in the school employees medical insurance, state mandated pay increases and salary step raises.
Deloach said the state's requirement for maintenance of effort would not be met if the school budget was cut, resulting in the loss of state Basic Education Program funds. She said the Commission did not want that to happen. She said the county is about $130,000 above the state's requirement on maintenance of effort.
Director of Schools Kevin Ward said the system had seen the need for cuts over the past three years, resulting in the cuts of 35 teaching positions through attrition, for a savings of $1.75 million and other cuts bringing the total to $2.3 million.
"We are operating on a very tight budget," Ward said.
Ward also said he did not appreciate the mayor bypassing the school board and going directly to the state on school matters.
The approved $2.33 property tax rate is divided into four funding areas. The General Purpose School Fund ($1.04) and the County Road Fund (13 cents) remain the same as last year. The County General Fund is increased by 15 cents to $1.01.5 cents and Debt Service is increased by 3 cents to 14.5 cents.
While the General Fund had numerous cuts in several county offices, there were some increases, including the jail, where the jail medical contract was increased by $67,000 and the Rescue Squad, which has a new contract with the county paying the squad $170,000 a year for four years for rescue services and emergency medical responses to the jail.