County waiting on revenue figures

Jun. 20—The budget committee of the Cumberland County Commission chose not to make cuts to the proposed 2022-'23 county budget until it has more information about revenue projections for the coming year.

Cumberland County Finance Director Nathan Brock said his office is still waiting on final numbers on the certified tax rate for next year, property tax revenue and sales tax revenue.

"Until we get those numbers, we don't know how we can move pennies or what our projected revenues are," Brock said during the June 9 meeting. "Over the next couple of weeks, we're going to have much better information and hopefully give you much better revenue numbers to look at."

The budget includes a 6% pay increase for county employees. Brock also noted the next fiscal year will include 27 pay days for employees instead of 26 due to the bi-weekly pay period.

"It's the nature of the beast," Brock said, noting it happens about every 10 years or so.

Medical insurance premiums will increase 8.25%.

The panel has also granted preliminary approval to $3.4 million in capital projects, which includes purchases of new patrol vehicles, ambulances and a tanker truck as well as building improvements, furniture and technology.

The preliminary $35.5 million county general budget does not include several items that would impact the budget, like changes to the Emergency Medical Services department salaries and new deputies for the sheriff's office.

"We're going into what looks like hard times," Terry Lowe, 5th District commissioner, said at the opening of the meeting. "They're predicting possibly going into a recession in the next few months. In order to keep our county finances strong, we want to be careful with this budget."

He said committee members needed to look at budget requests and possibly make cuts.

Rebecca Stone, 3rd District commissioner, suggested the committee wait to see funding estimates for the year. The finance office has used last year's funding allocations for its budget projections, but strong sales tax collections could shift how the county's tax rate is distributed, Stone said.

"I think there are so many people moving here our sales tax might continue to grow the same rate it's grown the past two years," Stone said. "Yes, the recession is hitting and people are spending less, but there's more people here to spend."

Stone pointed to new economic developments like the opening of Buc-ee's later this month and the motorsports park under construction in the Westel area.

However, she cautioned against adding new personnel until those figures are available.

Chad Norris, 1st District commissioner, asked why the panel should cut before those figures are known.

"We're going to cut at some point," he said. "Why cut now? We don't actually know — when we get the actual numbers, we're going to start shaving."

Joe Sherrill, 6th District commissioner, said, "I'd love to give everybody everything they wanted. But at the point you come back and say we've got to raise taxes, OK, it's time to get serious. We've got to balance out that discussion."

The preliminary budget for the general fund estimates revenues at $29.1 million, with an estimated general fund balance of $8.2 million. Brock recommended maintaining a $6 million fund balance in the general fund.

"That's talking about the worst of times," Brock said.

Nancy Hyder, 2nd District commissioner, said that was primarily to cover the county's payroll.

Brock said the county had enjoyed stronger fund balances in recent years. Last year, the county had a $12 million fund balance.

The county also has a debt service fund balance, estimated at $16 million, which Stone said could be used for some capital projects. The fund has about three years of debt payments in reserve. The county's debt policy calls for two to three years to be held in reserves.

"The debt service fund balance is something that when you look at it by itself is a large amount of money," Brock said. "But, keep in mind what that fund balance is."

Stone said it is a capital fund.

"If that balance is high, we can do more capital items out of it," she said.

Cumberland County Mayor Allen Foster cautioned the committee on using its fund balance reserves.

"It's more than just the money that you leave in there," he said. "It's how much you're digging into it on recurring expenses."

Brock said the commission sets a budget for one year, but commissioners also had to think about spending down the road.

"That's the challenge you have. You can do a lot of things this year because you have a nice fund balance, but how long can you sustain that if your goal is to keep the property tax rate at approximately what it is now or with modest increases?" he said.

Cumberland County recently completed a five-year property tax reappraisal which saw property values increase an average of 40-42% across the county. The county's board of equalization is currently hearing appeals and a certified tax rate, which provides the same amount of revenue as last year, is expected in the coming weeks.

The county commission has the ability to change the property tax allocation, shifting tax pennies from one fund to another.

Last year, Cumberland County's tax rate was set at $1.5653 per $100 of assessed value, a rate unchanged since 2017. The property tax was distributed to various funds:

—77.11 cents to the general fund

—17.07 cents to the solid waste fund

—36.36 cents to the general purpose school fund

—25.99 cents to the the county's debt service fund

The commission moved 9 cents from the school fund to the general fund last year, using historic sales tax collections to pay the balance of its required school funding.

One penny on the property tax provided approximately $152,930 in tax revenue last year.

"The sales tax revenue controls how many pennies on the property tax distribution you may have an opportunity to move into the general fund or the other funds," Brock said.

The budget committee will reconvene June 22 at 4:30 p.m. in the small meeting room of the Cumberland County Courthouse, 2 N. Main St.

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.