Local revenues for schools are projected to be $70,525,485 in the next budget year.
County Mayor Joe Grandy said Wednesday that school board members need to submit a balanced budget that does not require any new revenues from the county. School officials approved a budget last week that asks the county for an additional $1,769,87 to help make up a shortfall in funding for education.
Brad Hale, the school system’s budget director, said schools will use an identical $1.7 million from its reserve funds to cover the budget deficit. Hale said the new budget includes a 1% pay increase for school employees.
He said the school system’s fund balance was tracking at about $8 million before the novel coronavirus (COVID-19) pandemic. Hale said it remains to be seen how the pandemic and the business shutdowns in March and April have impacted the county’s sales tax collections, which currently all go to education.
Grandy said prior to COVID-19, county sales tax revenues were running $1 million ahead of projections.
“They (sales taxes) were on a nice course until March,” Grandy said.
Committee members noted Wednesday that the county is already faced with cutting as much as $6 million in expenses from its budget for next year. Commissioner Freddie Malone said it should be considered “a victory for the school system” if the county does not cut existing funding for education.
The mayor said the Budget Committee might have to take some “draconian measures” to balance the county’s budget this year. Grandy said it is reasonable to ask all department heads and county officeholders to trim another 5% from their budget proposals.
“We need to do something significant,” Grandy said.
In other business Wednesday, the committee voted to approve a new calculating formula for the county’s contribution to the tax increment financing district in downtown Johnson City. The current method is based on assessed property value.
The resolution would change that to the amount of the property taxes actually paid in the district, which would decrease the county’s contributions over the next nine years of the TIF agreement.
The Budget Committee also approved a separate resolution to change the debt ceiling in the TIF district from a fixed amount of $11 million to “an excess of 10% of the value of real property“ in the district.
Malone, who serves as the County Commission’s representative to the Johnson City Development Authority, said the amendments to the agreement have already been approved by the city of Johnson City and the JCDA. Malone said the resolutions would bring the downtown revitalization district into “uniformity” with upgrades made to the state’s TIF law in 2012.
A vote on similar revisions stalled in a 7-7 vote by county commissioners in February 2019. Had the changes been approved, Malone said the county would have kept $95,000 in property tax collections, and not owe $82,592 to the JCDA in the current fiscal year.
Malone said the JCDA has indicated it might forgive the shortfall in the county’s TIF payment this year if the county adopts the changes.
The Budget Committee also approved a new contract with East Tennessee State University’s William L. Jenkins Forensic Center that sees the costs to conduct death investigations and autopsies increase by 2% annually over the next four years.
If approved by Washington County commissioners on May 18, the county’s contract with ETSU for forensic services would go from $279,902 in the current fiscal year to $285,500 in the new budget. Grandy said the contract includes medical examiner services.