NEWPORT—Members of the Cocke County Finance Committee spent the better part of its hour-long meeting discussing options for a possible property tax increase on Thursday night.
The current property tax rate is $2.83 per $100 of assessed value.
“As it stands, the budget for 2019-20 has no tax increase unless we choose to raise and earmark money for our pitiful fund balance,” 7th District Commissioner Gary Carver said. “It’s something we need to think about and talk about.”
The last property tax increase occurred in 2017, when commissioners raised the rate 30 cents in order to balance the budget. Last August, the previous commission instituted a small tax decrease on their way out the door after many did not seek re-election or were defeated in the county’s general election.
“The biggest problem is that the 30 cents (increase in 2017) kept the machine going, it didn’t fix any problems,” Carver said.
Finance Committee chairman Forest Clevenger said its key for the county to plan for the future and have contingencies if problems arise with unexpected major capital expenses. The chairman has vocally said he is against raising property taxes in past meetings.
“The reason we had to increase (taxes in 2017) was because they needed to balance the budget and fix the shortfall,” Clevenger said. “No one anticipated the tax assessment going down as drastically as it did and the money went to balance the budget.
“There’s no way in the world I will stand here and raise property taxes to keep the machine running. I don’t have a problem if the people taking my money were banking my money and anticipating something down the road that isn’t going to cost me more.”
Clevenger, who runs a business in Cocke County, equated the 2017 tax hike as to loaning money to pay operating costs.
“The rule of business is you never borrow money to keep the machine going,” he said. “If your business is at the point where you’re borrowing money to pay operating costs, you’re going to have to lock the door.
“If you’re borrowing for infrastructure improvements or investments that’s another story,” Clevenger said.
Both Clevenger and Carver lamented the number of capital purchases with landfill and highway department equipment, fire trucks and the lot that could be coming in the next few years.
“Everyone calls to cut budgets, but you can’t nickel and dime $1 million out of a budget,” Carver said. “At that point you’re cutting services and none of us want to do that, you’ve got to find new revenue.”
2nd District Commissioner Gayla Blazer, who does not sit on the committee but was there in place of Clay Blazer, said constituents she hears from want to see funds designated for specific purposes if taxes are increased.
“I know how the public will look at it,” she said. “I want them to know where it is going and why (taxes) are being raised and not just thrown into another department.
“If we raise taxes, it needs to go somewhere besides the general fund.”
Committee members tasked finance director Heather McGaha to draft three separate proposals indicated a seven, 12 or 17 cent tax increase.
They proposed that two cents of the increase would go to economic development, two more cents earmarked for the landfill and the remainder in all three options to be earmarked for capital projects.
Each tax penny brings in an approximate $55,000 in revenue for the county, according to McGaha.
The 17-cent hike would add around $935,000 to county coffers.
Carver said by placing most of the revenue in capital projects, there would be a process for the funds to be used, instead of just throwing it in the general fund.
“It lets us build the fund balance and gives us a process and allows us to vet a project,” Carver said.