Under pressure from the State Comptroller’s office and facing a citizenry angry with a possible $30 wheel tax and a proposed 27-cent property tax, the Grainger County Commission met between a rock and a hard place Monday night.
According to Commissioner James Acuff, the current property tax is $2.42 per $100 of assessed value. The increase would put the property tax at $2.68 per $100. A quarter will go to the general fund with two cents going to the sanitation department, if passed.
The budget for 2019-20 is slated to be $9.6 million. The proposed wheel tax and property tax increase would raise $945,000, according to County Mayor Mike Byrd.
The county is currently budgeted $508,000 in the red.
In years past, the county has dealt with shortages by dipping into the fund balance, Byrd said.
“Since 2013, the county has spent $1.6 million of the fund balance to balance the budget,” Byrd said.
However, State Comptroller Justin Wilson says that for each of the past eight fiscal years, the Grainger County Board of Commissioners has adopted a General Fund budget with appropriations that exceeded planned revenues.
For example, audit results for FY 2017-18 revealed that, “Officials appropriated $725,755 of the estimated July 1 unassigned fund balance in the 2019 budget; however, the actual available unassigned fund balance was only $599,936. Therefore, the County Commission appropriated $125,819 above what was available for the 2019 budget year.”
Byrd suggested the budget should be examined line by line. Any office holder who did not want budget cuts could sue the county, if they felt the need.
What happened to cause Grainger County to face these increases and a wheel tax?
“That’s a question myself and the citizens of Grainger County would like to know,” Acuff said.
Though the deadline for budgets is July 1, counties are required to balance their budgets for the upcoming fiscal year by August 31 or face the possibility of the Comptroller’s Office taking over the budgetary process and cutting non-essential services until the budget is balanced.
“Tough choices have to be made in the budget process when things get tight, as they seem to be here,” said Bryan Burklin, with the comptroller’s office. “The county commission has only one job to perform by statute every year, which is to pass a balanced budget and to set a tax rate. The solution to the problem is well understood in those situations. You either have to cut your expenses or you’ve got to raise revenues because (the budget) has to be balanced by Constitution and by statute in Tennessee.”
Burklin said that the Comptroller’s Office does not have the authority to grant an extension beyond August 31. In that case, the county has no authority to spend any money. This applies to all general budget functions and the highway department.
The school system will be funded because a law passed three years ago protects school operations.
With no budget on Sept. 1, the state would have to approve all expenditures by the county until the budget is in place, Burkland said. The State Comptroller’s Office would then take over the budget process.
“We’ve never had to use this authority,” Burkland said. “Comptroller Wilson doesn’t want to use this now. It would be a stain on the reputation of Grainger County and on the State of Tennessee really. You don’t want people in Nashville telling you how to spend your money locally. You know your operations better than we do. You’re better off passing a budget, whatever it takes.”
In such a situation, all discretionary money would be cut out of the budget before any increase in tax rates would be considered. All non-essential services and personnel would be subject to cuts.
The commission will come back at 7 p.m., Tuesday, July 22 at the Circuit Courtroom of the Grainger County Justice Center.