The Washington County Commission’s Budget Committee will recommend to the full commission Aug. 26 a proposed $118.5 million budget, pending review by the Board of Education of a three-step move to balance the school system’s budget and leave it with about $3 million in the bank.
“We are proposing a funding mechanism (that) would allow them to fully fund their expenditure request,” County Mayor Dan Eldridge said. “The Budget Committee has now recommended the budget subject to the Board of Education’s confirmation.”
As always, the biggest slice of the county’s overall financial pie goes to fund schools.
Director of Schools Ron Dykes informed committee members last month that the Washington County School System’s 2014 budget deficit has been reduced by another $1 million, but that still left the system with a $1.5 million shortfall. The Board of Education already has eliminated 10 instructional positions in grades K-8.
The school system’s estimated total expenses for FY 2014 are at this point about $62.7 million.
A proposal was introduced at the Budget Committee meeting Friday to remedy the $1.5 deficit. The proposal, which passed, includes the use of about $136,000, or an additional 1 percent from the county’s local option sales tax revenues and the transfer of two pennies from the county’s debt service fund to the school’s general fund in the amount of $302,000.
The remaining $1 million will be pulled from the school system’s fund balance, or reserves, to cancel out the deficit, though it would reduce the system’s fund balance from $4 million to about $3 million. The state requires the school system to maintain a nearly $1.9 million reserve.
“I feel good about where we are,” Eldridge said. “We’re able to accommodate a lot of things with this budget. We have about $10 million in capital projects. We have a 2 percent salary increase for full-time employees. It’s a modest increase, but we are keeping up with inflation. Another key piece of this is the expansion of the SRO program and school security improvements. And there has been no increase in property taxes proposed.”
Budget Committee member Pete Speropulos voted against the school-funding proposal.
“I felt like taking three pennies from debt service would have been a compromise and would have boosted the schools’ revenues up a little bit,” he said.
The Board of Education will examine the proposal at a special called meeting Thursday.
“Our options would be to make additional cuts to personnel, which is not my preference, or to use money from our undesignated reserves,” Dykes said. “It’s a bitter pill to swallow, since we’ve already adjusted our budget by more than $2 million. In essence, (using money from reserves) would leave us with about $900,000 to tap into.”
All property taxes collected are projected to total about $54 million in FY 2014, about $500,000 more than the current year but less than a 1 percent gain.
Meanwhile, local option sales tax collections for Washington County, including Johnson City and Jonesborough, are estimated to come in at about $45 million. The local tax is 9.5 percent. The state takes in all taxes and keeps 7 percent. The remaining 2.5 percent is appropriated between the three jurisdictions.
The first 50 percent of the 2.5 percent goes to school systems. The second half goes to the jurisdiction in which the tax was collected.
“Of that second half, 6 percent goes to the county, but we are obligated to give that to county schools, meaning it is shared with Johnson City and Jonesborough,” Eldridge said. “Jonesborough gets 6 percent as well, but they do not have a school system, Finally, Johnson City gets 88 percent, and they are not obligated by law to give any of that to schools. It goes into their general fund, but they do normally write a check from that to help out city schools.”
The total county budget includes a projected $35.4 million general fund, which pays mainly for essential services. However, the Budget Committee was forced to get creative, considering the county’s revenues are estimated at about $33.8 million.
“We have decided to use unappropriated funds from our cash reserves to meet that more than $1.5 million deficit,” Eldridge said. “We’re very fortunate. Right now, we have about $18.5 million in our fund balance — the highest in the county’s history.”
Along with schools and the general fund, the county has additional expenses, such as the Highway Department ($9 million), debt service fund ($9.7 million) and solid waste ($1.7 million), as well as several hundred thousand dollars in other capital projects and the drug fund.
Meanwhile, increased expenditures in the general fund include a nearly $186,000 increase in the Sheriff’s Department budget due to the expansion of the county’s SRO program; more than $70,000 for expenses budgeted for the county attorney; $119,000 for the addition of a third Sessions Court judge; and $148,000 to pay for four additional detention officers at the jail.
Most department heads are getting a 4 to 5 percent raise.
The county mayor’s annual salary is set to rise from $104,955 to $109,720. That’s $4,765, or about 4.3 percent.
Requested expenses for the County Commission are up by about $16,000 and include a jump in employee and dependent insurance costs, Social Security, dues and memberships, duplicating supplies, rentals and state retirement.
Some line items have been reduced, such as travel, for which no money has been requested, as well as salaries and wages. The overall projected expenditures for the 25-member commission is $295,126.
The County Commission may or may not receive a completed budget to review at the Aug. 26 meeting. Board of Education and Budget Committee meetings may alter the schedule, and special called meetings may be needed. For information, go to www.washingtoncountytn.org.