Hamblen County Mayor Bill Brittain made a proposed change to the 2020-2021 fiscal year budget Thursday night, asking for a three-cent property tax increase.
Brittain had originally put out a proposal with a five-cent property tax increase in next year’s budget. But, even a two-cent cut still made some commissioners feel uneasy.
“It’s a really rough time right now for a tax increase,” said Howard Shipley, chairman of the Hamblen County Commission.
The County Commission continued its budget hearings Tuesday, reviewing the garbage, highway and general debt service funds. Brittain went over the property tax increase during the general debt service fund portion, highlighting how the county would be able to fund building a new jail and renovations at Morristown-Hamblen High School West.
At this point, the county has taken out a bond for $20 million to start paying for the projects.
The county is set to issue three more bonds over the next two years.
Brittain said while reviewing the bond issues, he found the interest rates were lower, and the bonds could be issued over a larger timeframe, which would result in his office asking for a lesser tax hike.
With the threat of COVID-19 still on the horizon and a shut down for most businesses across the state for a month in April, commissioners are leery about the possibility of a tax increase.
“It couldn’t come at a worse time,” Shipley said.
Some commissioners proposed using the county’s fund balance, which is its reserves, to help pay for the project. Brittain said portions of the county’s fund balance are already in the mix, and there could be consequences if the county did not raise revenue.
He said the credit companies look at that and the county’s credit rating could lower.
“It would affect our credit rating and cost us more,” Brittain said.
Commissioners brought up the idea of perhaps doing a 1.5-cent property tax increase this year and the rest next year. Brittain said he did not know if that would affect the credit rating and he would talk to financial advisors.
The commission is in the process of trying to approve a bare bones budget. Brittain has said there are a lot of questions about the budgeting due to not knowing what the April sales tax figures will be, which come out at the end of the month.
The expectation is those projections will be historically low and unlike anything ever seen before.
“Do we have to make a decision right now?” Shipley asked.
“No,” Brittain responded. “Just to reiterate this is a first draft.”
The committee voted 12-0 to discuss a potential property tax increase and the debt services fund on June 23.
Barry Poole, Hamblen County road superintendent, also updated the commission on the highway department.
The commission had approved adding a second road patching crew last year. Poole said it has been difficult to man both crews fully because of staffing issues.
He said for the budget this year, he is also buying less salt to cut costs. He said the hope is there won’t be as much snow, following the last two years of mild, wet winters.
“Keep your fingers crossed,” he said.
Right now, he said the budget consists of $700,000 for road paving next year.
He gave commissioners a handout of the roads paved over the last three years. Poole listed several reasons roads were chosen to be paved - some is due to deteriorating, some is due to the population and several other reasons lead to the choices to pave.
“There is no perfect way to figure out where to pave,” he said.
The budget committee voted 12-0 to accept the highway and garbage budgets.