Commission approves ’13 budget without property tax increase

By Jason R. Mullins

The Carter County Commission made quick work of their 2013 budget proposal Monday morning. The legislative body accepted the spending and revenue plans which were highlighted by a surprise decision to leave the certified property tax rate at its current level.

Despite the general consensus that debate on the budget would be a lengthy process, the county commission completed the discussion and held a vote on the property tax rate and budget in less than 30 minutes.

At their last workshop in June, the budget committee agreed to a motion setting the certified property tax rate at $2.21 per $100 of assessed value. The six-cent increase featured an additional three cents going to the school system and another three cents earmarked for the county’s debt service.

Despite the previous arrangement, County Commissioner Charlie Bayless presented a motion asking for the tax rate to remain at its 2012 level of $2.15. He explained his motion would give “the school system what they’re wanting, the debt service and the county’s general fund will be fine.”

Bayless’ motion was seconded by Budget Committee Chairman Harry Sisk.

After making his request to leave taxes at their current rate, County Commissioner Nancy Brown of Roan Mountain asked Bayless, “What are you cutting to give the school system what they want and they say they need?”

Bayless said the money would be obtained from a portion of the $4,000,000 currently in the county’s general purpose fund. He added that the county has already learned that approximately $900,000 will be returned in surplus from the sheriff’s office and unused funds originally allocated to pay for insurance premium increases that did not materialize.

Some commissioners voiced apprehension regarding the potential financial liability of keeping property taxes at their present rate.

“I agree that we don’t need to have arbitrary tax increases,” said Commissioner Steve Lowrance of Valley Forge. “When you’re talking about the possibility of using $900,000 from the general fund that could be a risky proposition for the county. I know we need a roof for the (old) jail. That’s going to cost us $300,000. We were also talking about putting a roof on the courthouse. That could cost another $200,000. The landfill is also considering some projects. I fear that this could put in a serious bind next year. It’s definitely a risk.”

As part of his motion, Bayless asked for 86.5 to be earmarked for the county’s general operating expenses, 11.5 cents for debt service, 13 cents for the highway department and $1.04 for the school system.

On Thursday, Carter County Interim Director of Schools Dr. Kevin Ward, along with school supervisors and Finance Director Ingrid Deloach, spoke with state education officials regarding the 2013 budget. Deloach explained that the county learned at the meeting that the previous property tax increase of three cents for the school system did not meet the state’s maintenance-of-effort guidelines. “(Commissioner Bayless’) proposal will make sure we meet that requirement of the state,” she said.

According to Ward, the state’s maintenance-of-effort test mandates that a local government cannot budget less funding from one year to the next. “In our meeting with the state, they calculated this year’s budget versus last year’s budget was reduced by approximately $307,000. The state prohibits us from doing that,” he said.

The commission agreed to Bayless’ motion on the property tax rate by a vote of 19 to 5. Voting yes were Commissioners Peters, Ritchie, Hodge, Street, Trivett, Winters, Sisk, Tester, Lowrance, Blankenship, Bayless, Arney, Renfro, Chambers, Lewis, Culler, Kyte, Hicks and Gobble.

Voting against the tax rate were Brown, Bowers, Von Cannon, Sams and Armstrong. Commissioner Dickie Renfro initially cast a “nay” vote but reversed it before the vote was officially recorded by County Clerk Mary Gouge.

Ward said he was pleased with Bayless’ property tax motion. The 2013 property tax rate will assist the school system with a funding gap for the upcoming school year. After three rounds of budget cuts, the Carter County Board of Education reduced their spending plan for 2012-2013 by nearly $1.8 million. Despite those reductions, however, the school board informed the budget committee in May that they still required approximately $839,000 to defray the budget gap.

Ward said the county commission’s decision will fulfill most of the 2012-2013 budget shortfall. The revision to the property tax allocation for the school system’s general curriculum fund will increase the funding level from $19,793,215 to $19,935,136.

Several individuals in attendance at Monday’s meeting voiced their displeasure at a decision to alter the agenda. While the announced agenda placed the discussion and the vote on the tax and budget proposals closer to the end of the meeting, Bayless presented his property tax motion prior to Budget Chairman Sisk’s presentation of the committee’s recommendations.

County Mayor Leon Humphrey also noted that he approved of the decision to keep the property tax at its current level, but chided the commissioners for “voting on a motion without any type of explanation or discussion of what impact their decision will have. They had no true accounting and no real discussion.”

Humphrey added, “The commission had a real opportunity to restore the People’s confidence, but their actions will only lead to a loss of even more trust in this body.”

Chairman Bowers, who voted against the Bayless property tax rate, said he was pleased with the decision to not raise taxes, but expressed his concern about the possible impact. “I’m happy we didn’t raise taxes, but I’m not pleased that we’re going to be taking this money from fund balance. It’s going to leave the county stretched pretty tight for next year,” he said.

Bowers did add, however, “It may end up being an inducement for us to stay within our budget, but, as Mr. Lowrance pointed out, we have a lot of areas of need. We’re certainly going to be walking a tightrope over the next year.”

During public comments at yesterday’s county commission meeting, Hampton resident Roy Livingston stated that many people were unsure of the actual impact of the budget and tax proposal. “A lot of people here have no idea what happened. This has the appearance of a backroom deal.”

Livingston also argued that the final budget was unduly influenced by the county school system. “This commission is made up of school system lobbyists. Whatever the school system wants, they get. Everyone else gets the scraps if there are any scraps left. You won’t see anyone from the school system at (county commission) meetings again until we start the budget process again next year,” he noted.

Carter County Citizens in Action President Scott Snell commented, “I want to congratulate you, Mr. Chairman and the rest of the county commission. This is obviously the finest performance of a scripted play that I have seen in some time. I regret we could not have had an improvised performance instead.”