County panel keeps tax rate steady

Jul. 15—The Cumberland County budget committee recommended holding the Cumberland County property tax rate at $1.5653 per $100 of assessed value for the 2021-'22 fiscal year.

After a record year of sales tax collections, the panel did recommend redistributing the property tax, using more sales tax dollars to meet the minimum funding requirements for the school system and moving 9 cents of the property tax rate to the county general fund.

"Nine cents will cover everything you've said yes to," Cumberland County Mayor Allen Foster told the committee Tuesday.

Sales tax collections have averaged about 16% above projections this year, with an estimated 2020-'21 collections of $12.2 million designated for the school system.

The county budgeted $10.5 million in sales tax revenue for the year.

Brock said the state projects a 3.7% increase next year. That would equate to about $12.7 million in revenue for the school system.

"We trusted the state's numbers of 3.7%," Brock told the panel.

The panel approved the school system budget in early June. That budget did not seek additional funding from the county beyond the $18.7 million required by the state as the Basic Education Program local match.

With $12.7 million in projected sales tax revenue for the school system, the county would need to provide about $5.6 million in property tax revenue — about 36.36 cents per $100 of assessed value.

Brock cautioned the panel that it would have to make up any shortfall if sales tax collections did not hit the projected amounts.

"The county has to make the board of education whole on that allocation of required BEP funding," he said. "There is a possibility we would have to go into the fund balance of the general fund. That's your rescue fund."

Each penny of property tax in Cumberland County generates $152,930 in revenue for the county.

Last year, the county allocated 50.1 cents per $100 of assessed value to the schools. With 36.36 cents required to meet funding demands for the school system, the county has 13.74 cents per $100 of assessed value that could be allocated to other budgets.

Brock recommended the commission add 9 cents to the general fund budget, an increase of about $1.37 million; 3 cents to the sanitation fund, about $458,700; and 1.74 cents to the debt service fund, an increase of $266,000.

The proposed budget includes a 6% pay increase for all county employees and reclassification of employees in the Cumberland County Sheriff's Office. It also includes about $2 million in capital purchases, including three new ambulances and a new fire engine, which will be paid for in part with about $546,000 in one-time state funding.

The draft general fund budget included $32 million in expenses and an estimated $28.9 million in revenue with the additional 9 cents of property tax revenue.

"You're spending more than you did in the prior year, so fund balance is being used for that," Brock said. "But you have the additional funds that are coming into that. It will only improve the ending fund balance."

Final numbers are still being calculated after the committee approved some changes to the county's general fund budget, including adding a chief deputy position to the election commission office, $4,000; funding nonprofit requests, about $25,000 more than last year; and about $100,000 more for fuel costs.

The county would have a budgeted fund balance reserve of about $7 million.

The sanitation fund projects $3 million in expenses with about $3.19 million in revenue, leaving a reserve balance of about $1.16 million. Brock noted several pieces of equipment will need to be replaced in the coming years and said adding to the fund this year would allow the county to build up the fund balance for those purchases.

The debt service fund includes $6.5 million in debt payments, with a $15.5 million debt service fund balance following the property tax allocation change. Brock estimated the county's total indebtedness at $52 million.

Counties across the state are completing their budget development at this time, and property tax rates have not yet been updated.

According to the Tennessee Comptroller's website, Cumberland County had the fifth lowest property tax among the state's 95 counties last year. Gibson and Carroll counties, however, both have additional special school district tax rates which, when added to the county rate, result in a higher tax rate than Cumberland County.

With the budget review complete, the panel's Thursday meeting was canceled. The finance office will prepare budget documents and print a budget synopsis in the Crossville Chronicle.

A tentative public hearing was set for Aug. 10, with time for citizens to share their thoughts on the budgets. The commission will meet in a special session following that hearing to set the tax rate and consider the budget proposals.

Area tax rates

Cumberland County—$1.5653

Gibson County—$1.0322*

Carroll County—$1.4131*

Fayette County—$1.5074

McMinn County—$1.5469

Loudon County—$1.8035

Sevier County—$1.86

Fentress County—$1.91

White County—$2.05

Rhea County—$2.2548

Roane County—$2.4709

Putnam County—$2.926

*County tax rate does not include special school district tax rates

Other county fund budgets advance

The Cumberland County Budget Committee also approved several other funds that do not require property tax or sales tax funding during its July 13 meeting:

—Railroad Authority: funded by grants, the budget includes $1,000 for some required state filings. The commission can amend the budget should it receive grants during the year

—Drug Fund: funded by drug court fees, drug control fines and proceeds from confiscated property, this budget includes about $78,500 in expenses for a vehicle for the sheriff's office and other law enforcement equipment. The budget does not include projections on confiscated property proceeds. Those revenues are added as they occur during the year. Projected revenue from fines is $25,852, with the balance of expenses coming from the fund balance, leaving a reserve of $178,993

—Courthouse Maintenance Fund: restricted to maintenance projects at the courthouse and justice center, this is funded through the special purpose litigation tax, with a projected revenue of $39,881. The budget includes about $118,000 in expenses from the carryover of maintenance projects not completed in the 2020-'21 fiscal year. No new maintenance projects are planned this next year. The budget leaves a reserve fund of $453,795

—Highway Department: funded from state gasoline taxes, state aid funding and the state bridge program, this includes $4.6 million in expenses and revenue of $4.4 million, leaving a reserve of $968,455 — about three months operating expenses

The proposed budgets will now move to the Cumberland County Commission for final consideration. A tentative meeting was scheduled for Aug. 10 at 5 p.m. with a public hearing prior to the meeting.

Heather Mullinix is editor of the Crossville Chronicle. She covers schools and education in Cumberland County. She may be reached at hmullinix@crossville-chronicle.com.