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Washington County disrespects its taxpayers living in Johnson City

Ed McKinney, Community Voices • Jan 10, 2020 at 7:30 AM

In 2016, the Washington County Commission heard a proposal to raise the property tax by 40 cents. The plan was called the Washington County Capital Investment Plan. Quoting from the report, “An objective of the plan is to establish a deliberate strategy to eliminate the bonded debt of Washington County by 2036.” The report continued, “The potential to save millions of dollars in interest cost each year directly benefits the property taxpayers.”

The stated reason for such a plan was “In the next 10 years, more than $100 million in funding is required to meet needs already identified.” The plan to be implemented would bring “a deliberate and disciplined approach to capital needs prioritization and funding.”

The cost to fund the plan was stated as a 23-cent addition to the property tax rate that would raise monies to put the county on track to eliminate the debt of the county. The plan also called for an 11-cent tax rate increase in 2020 and a 4-cent increase in 2023 to fund “a proposed K-8 school in Jonesborough along with the share to Johnson City.”

The benefit of a long-term Capital Investment Plan was to “diminish the burden on county property taxpayers over time by creating a ‘pay-as-you-go’ strategy for many of the ongoing capital investment needs that limit the county’s reliance on borrowing and minimizes interest paid.”

And if this plan was not adopted, the report states “the county will be maximizing their capacity to borrow and placing a greater burden on the taxpayers to service the debt.” That would mean an increase in property taxes.

In 2016, the property tax rate was raised from $1.97980 to $2.37980. That was a 40-cent tax increase in the property tax rate. The Capital Investment Plan was started. The rate remained the same until 2019 when the rate was decreased after the reassessment of property. Even though there was a rate decrease, the total revenue has increased.

As of June 30, 2019, the Washington County Commission spent $28,207,235 for the Boones Creek Elementary/Middle School complex. In addition, $4,982,387 was spent for the athletic facility. So the total cost of the Boones Creek project so far is $33,189,622.

The Boones Creek project used property tax collections from prior years to build a fund balance to pay for most of the project and avoid bonding the project. Johnson City’s share came from bonds issued in fiscal year 2017. Total Washington County bond issues for schools amounted to $20,115,207. The amount shared with Johnson City Schools was $7,984,899. That is not the 48% student population ratio amount.

Of the total amount spent on the Boones Creek capital project, Johnson City schools should have received approximately $15,931,019. School children in Johnson City schools had a shortfall of $7,946,120 not shared because most of the project was funded with cash on hand paid mostly by city taxpayers.

It is a foregone conclusion that Johnson City taxpayers are subsidizing Washington County Schools. In addition, they are also paying for the operation, maintenance and building of the schools in Johnson City. Whoever believes this is fair treatment of the children in Johnson City needs to spend some time looking at the actual numbers. If the role was reversed you can rest assured that residents who live outside the city limits would be ballistic.

The Washington County Commission and the Washington County School Board wasted $1,062,230 on Jonesborough schemes 1-6, which were tossed aside because they were not working together to come to an agreement. Most likely there were outside influences that derailed those schemes and you can see the results.

The proposed funding for a new Jonesborough elementary and middle school shows a project costing approximately $32.75 million. In an attempt to avoid having to share capital bonding monies with Johnson City Schools, the town of Jonesborough will do the borrowing and Washington County Schools will rent the facilities paying off the bonded money monthly. This was a direct attempt to not share bonded capital project monies with Johnson City as required by state law.

The length of the bonded loan monies for the Jonesborough school project is to be 38 years. Where did these people learn about financing major projects? The longer the amount of time to pay off any loan, the more it will cost in interest paid on the loan. They did not even follow their 2016 Washington County Capital Investment plan. In addition, the current leaders in both the city and the county will long be out of office by the time the project is paid for.

Taxpayers get nothing in return for the interest they pay on a loan. Once the total is paid back in 38 years, the project will actually cost approximately more than $70 million. This more than doubles the original cost of the project. Yes, I know you may be able to pay it off earlier without a penalty and avoid some of the interest. Does anyone think that will happen? Now if you think that is a good deal, I would like to sell you the Atlantic Ocean.

We elected people to be our representatives and to protect and spend our tax dollars using some common sense. This is exactly why some citizens in general have financial problems. They can’t see what lies before them because they are blinded by their enthusiasm to get something new and they do not know how to do sixth-grade math.

If you use the student ratio as a means of determining Johnson City Schools’ share of the monies used to build a new Jonesborough elementary and middle school, the city’s share would be $15.7 million. So far, the amount being discussed is $12.5 million. This is another shortfall for the school children in Johnson City of $3.2 million. Yet the citizens in Johnson City will be paying back approximately 62% of that $70+ million loan payment or approximately $43.4+ million. This does not treat Johnson City property taxpayers with respect.

I get exactly what they are trying to do. They are trying to keep the property tax as low as possible. I understand that. However, when you foolishly spend taxpayer money, the property taxes will not remain low. When you spend over a million dollars and you get nothing in return that is not leadership! Nor is it when you spend approximately $38+ million dollars in interest only on a school project that costs $32.75 million! Our elected officials need to protect taxpayer dollars as if they were their own. Now you know why there was a rush to sign the agreement and no explanation about the total cost of the school capital project that would include interest paid on the bond. That reeks with poor leadership and lacks transparency.

Ed McKinney is a retired Johnson City business educator.

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