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Carter Budget Committee will propose budget without tax increase

John Thompson • Aug 13, 2018 at 10:46 PM

ELIZABETHTON — It now appears certain there will not be an increase in the property tax rate this year in Carter County. Last year’s rate of $2.47 per $100 of assessed value will remain the same.

The Budget Committee of the Carter County Commission met Monday night to approve a budget recommendation to the commission that has the same structure as one that was vetoed by Mayor Leon Humphrey.

The mayor had said he would veto any budget that included a property tax increase. The one vetoed included an 11-cent increase in the property tax rate.

In seeking a solution to the mayor’s veto, the Budget Committee agreed with a recommendation made by Commissioner Mike Hill on the floor of the County Commission during a special meeting Aug. 6 to override the veto.

Hill had told the commissioners about a conversation he had with a staffer in the state comptroller’s office. That staffer had told Hill the county’s Debt Service had a large fund balance that could be tapped.

In response to Hill’s recommendation, the Budget Committee voted to transfer some of the tax rate that had been allocated to debt service.

Last year, debt service was funded at 24.5 cents. This year, instead of increasing the property tax rate by 11 cents, the commission will redistribute 11 cents of the debt service funding.

While the redistribution solves the short-term budget problems, it does not solve the long-term funding problem that had initially led the Budget Committee to propose the property tax increase.

Committee member Isaiah Grindstaff exposed that problem with a question he asked County Finance Director Brad Burke.

Grindstaff asked Burke if the county’s budget was in balance. Burke told Grindstaff that the budget had $900,000 more in expenses that it had in revenue.

Commissioner Al Meehan followed up by saying “we have an unsustainable situation. I don’t see any revenue increases next year.” He went on to say the county needs “to get on the ball with economic development.”

The Budget Committee also offered a solution to another of the mayor’s vetoes, this on funding for a $600,000 project to provide better security to the Carter County Courthouse, include limiting access to the building to one point of entry.

Humphrey said he objected to a proposal that money for the project be borrowed from debt service and paid back, along with 2 percent interest.

Humphrey said he was opposed to using the citizens’ funds and making them pay interest when it was paid back.

Grindstaff made an alternate proposal to fund the project with $150,000 from the county’s litigation fund and $450,000 from fund balance.

His motion passed and will be recommended to the full Commission.

The committee also voted to recommend that some of the General Fund fund balance be used to pay off $128,053.22 in school debt. That recommendation was approved unanimously.

The committee will make its recommendations to the Carter County Commission at its next meeting on Aug. 27 at 6 p.m. in the Main Courtroom of the Courthouse.

A public hearing on the proposed budget will be held in the Main Courtroom at 5 p.m. on Aug. 27.

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