County is hard pressed to find cash

Written by Byron Hensley | 28 July 2010

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Faced with such immediate costs as paying to settle Tullahoma’s lawsuit against the county and opening the new Deerfield Elementary School, and with the need to build a new jail in the near future, the budget & finance committee of the Coffee County Commission is wrestling with options to find ways to pay.
Among the options the committee is looking at are implementing a county wheel tax, or leaving county property taxes at their current rate rather than accepting the new Certified Tax Rate issued by the state. One member of the committee, Commissioner Lee Duckett, said that if a tax increase is required to open Deerfield, which will serve students on the northern end of the county, he will support it. “I think the rural commissioners would not support a budget without the money to open Deerfield,” he said.
“If we leave the tax rate at $2.46, it will generate enough money to probably pay to open Deerfield this year,” committee chairman Ted Frisby said. $2.46 has been the county’s uniform tax rate for the last three budget years. The county this week received a new Certified Tax Rate from the state of $2.29. To go with a rate other than the certified rate, the commission will have to hold a public hearing.
Were the county to keep the certified rate, property owners would theoretically pay the same on their property as in 2009. On a $100,000 home, a property owner would owe the county $576. If the county opted to keep its $2.49 rate, the owner would pay an additional $47 per year. The burden would increase by $70 for a $150,000 home, and by $94 for a $200,000 home.
Under the current budget divisions, a $2.49 rate would bring Coffee Schools an additional $549,275, which is less than the $650,000 needed to open Deerfield.
Deerfield could be completely paid for under a $$2.58 uniform rate, which would generate $688,498 for schools, another option the committee is looking at. That rate would allow the county to begin a new jail/justice center project in 2011, a three-year project.
The committee is also weighing the prospect of implementing a wheel tax as an alternative to raising property taxes. A $30 wheel tax, at a 100 percent collection rate, could net the county nearly $1.6 million. A $40 wheel tax, at 100 percent collection rate, could bring in $2.12 million per year.
The committee had asked county departments to resubmit budgets for the 2010-11 fiscal year taking funding requests back to 2009 levels, and subtracting 2.5 percent from that. The departmental budgets have been resubmitted, but projected expenditures still exceed projected revenues, Budget Director Mariana Eddinger said.
“This has been the longest and hardest budget we’ve had since I’ve been here,” County Mayor David Pennington said.
Making things tough is the need to pay $250,000 this year to the City of Tullahoma to settle the city’s lawsuit against the county for using part of rural sales tax collections to pay for school bus transportation for rural students, a practice begun in the early 80s to hold property taxes down throughout the county. Next year, the county will have to pay $1.75 million to finish the settlement. The budget committee is looking at paying off the lawsuit by increasing the general debt service fund.
After the county finishes paying Tullahoma, it will have to look at building a new jail. Last year, the commission was warned by a representative of a state body that determines jail standards that the county’s current jail is overcrowded and below standards, and that the county needs to look at building a new jail or risk dire consequences such as massive fines should a prisoner lawsuit against the county end up in court.
Pennington said that the county can avoid penalties if it can show that it has a plan to build and pay for a new jail. A consulting firm has estimated that a new jail and justice center would cost in the neighborhood of $25 million.