ERWIN — Unicoi County property owners appear to be in for a tax increase.
In a final meeting of the County Commission’s Budget Committee on Thursday, six of the eight commissioners present voted to pass the 2020-21 budget and its more than $328,000 shortfall on to the full commission.
While the committee vote did not include a recommendation on how to balance the budget, a subsequent poll of the commissioners indicated a majority favor an increase in the county property tax rate in amounts ranging from 10.5 to 17 cents.
According to the commissioners the smaller 10.5-cent tax increase will be sufficient to balance the budget while the larger 17-cent increase will cover the $328,381 deficit as well as recurring expenses paid for with one-time revenue sources and the restoration of some of the more than $200,000 drop in the county’s general fund balance that was used to balance the current year’s budget.
Commissioners Jason Harris and Marie Rice opposed the recommendation to advance the deficit budget, with Rice arguing against passing the budget on to the full commission without a plan for how to cover the shortfall.
Commission Vice Chairman Jamie Harris was not present for Thursday night’s committee meeting.
County Mayor Garland “Bubba” Evely advised against drawing from the general fund balance to cover the budget shortfall again this year, citing the “ding” it caused in this year’s audit and the risk of cash flow shortage for day-to-day operations. “To do it on a recurring basis is not recommended,” Evely said.
Committee Chairman Stephen Hendrix argued against deeper cuts to departmental budgets, saying the committee had gone about as far as it could go without impacting staffing.
Commission Chairman Loren Thomas noted the budget already borrows 4 cents of the tax rate, or approximately $127,000, from the county’s robust debt service that he said will bleed out in the new fiscal year and, if not replaced, will bleed out further in future budget years.
“Being realistic,” Evely said, “last year when the (three-year incentive) pay raises passed, there should have been a tax increase of at least that amount. We didn’t do that and we’ve been fortunate so far that the shortfall is not as much as we thought it would be.
“My recommendation is to do at least 10 and a half cents for recurring expense. You’re looking at a minimum of at least that, and more to build the fund balance back.”
Commissioner John Mosley suggested a 15-cent tax increase. And Hendrix suggested a 17-cent increase “to cover our cost and add a little going forward.”
According to Hendrix, a 17-cent increase would rebuild the general fund by about $200,000 and restore the county’s previous $1 million fund balance that was in keeping with state comptroller recommendations.
The commission will cast its first vote to set and publish the deficit budget in a special called meeting scheduled for Monday. A second and final vote to balance the budget will be conducted at the commission’s next regular meeting on Monday, June 22.