Budget Committee recommends tax increase of 34.67 cents

The Hawkins County Commission will be asked on June 24 to approve the 2024-25 fiscal year budget with a 34.67 cent property tax increase.

The commission’s Budget Committee was presented Wednesday with the third draft of the proposed 2024-25 budget, which began the meeting with a $4.66 million deficit.

Every penny on the county’s property tax rate generates $122,262 based on a 93% collection rate. The 34.67 cent tax increase recommended Wednesday would set the county’s property tax rate at $2.6714.

Budget Committee chairman Jason Roach noted that the average home in Hawkins County is valued at $150,000. If approved next month the 34.67 cent property tax hike would increase the annual tax bill for a $150,000 homeowner by about $130 per year.

A video of the entire property tax increase discussion from Wednesday’s Budget Committee meeting can be seen in the online version of this article at www.therogersvillereview.com

Three separate votes

Budget Committee members voted on the proposed tax increase Wednesday in three parts.

The first part was for a 7 cent increase to address the Highway Department’s budget shortfall. The Highway Department operates on a budget separate from the county general fund.

Without the additional revenue the Highway Department’s 2024-25 budget was projected to end the next fiscal year with a negative fund balance, which would be rejected by the state Comptroller’s office That 7 cent increase for the Highway Department was recommended 6-0 by the committee.

The second part was 10 cents to address the Goshen Valley Road bridge repair/replacement project. Of that amount, 8 cents would be allocated for the creation of a Highway Capital Projects line item specifically to deal with all impending bridge projects. The other 2 cents would go toward highway general capital outlay which can be used for the bridge or any other road projects as they arise.

That 10 cent increase was recommended by the Budget Committee 4-2 with commissioner Danny Alvis and John Gibson opposed. Gibson said he was reluctant to approve such a significant tax increase until a solid plan was in place for how it will be used. County Mayor said there is a plan, and those funds will be needed in the next fiscal year to rehab the Goshen Valley bridge.

The third part was 17.67 cents to address the $4.66 million General Fund deficit. The biggest new expenditure in the general fund is $1.787 million to place the Hawkins County Sheriff’s office on the county pay scale, which will increase pay significantly for most officers based on years of service and make their pay more competitive with other law enforcement agencies in the region.

Another big increase proposed for the general fund is increasing the Hawkins County EMS contribution from $200,000 this year to $400,000 in 2024-25. HCEMS director Jason Murrell presented the committee with figures outlining major decreases in revenue, attributed mainly to decreased insurance payments on claims.

HCEMS initially asked for $600,000. Murrell said $400,000 is the bare minimum they could get by with this year without a major risk of cutting ambulances. HCEMS currently has five 24/7 ambulances on duty and one 12 hour ambulance.

The 17.667 cent portion of the property tax increase was recommended by the committee by a vote of 5-1 with Alvis opposed. Alvis said he supported the HCSO, but he felt the amount of salary raises being offered was too high.

‘We have to do something’

If the total 34.67 cent property tax increase is approved by the full commission on June 24, that will leave the county’s 2024-25 general fund budget with a projected deficit of $2.5 million. County finance director Eric Buchanan suggested that $2.5 million will actually be close to break-even at the end of the 2024-25 fiscal year.

Every year the commission overestimates spending and underestimates revenue, and most years the commissioner approves a budget deficit. For example last year the commission approved a $2.4 million deficit, but when actual numbers come in for the 2023-24 fiscal year, Buchanan is estimating the county reserve fund will actually grow by about $140,000.

That’s why the Budget Committee was shooting for a tax rate this year that would reduce of the projected deficit to about $2.5 million. When the fiscal years ends, barring the unforeseen, the budget should be close to even.

Roach said no one wants to increase taxes, but county revenue hasn’t kept up with inflation.

“It doesn’t cost the same to run a sheriff’s office this year a it did last year or five years ago,” Roach said. “It doesn’t cost the same for his deputies to go buy a loaf of bread and a gallon of milk, or to be able to have the American Dream of owning a home.”

“We have to do something,” Roach added. “If we don’t, we’re going to snowball. … I’m not trying to run up and down the street saying we need to raise taxes. I’m trying to run up and down the street and say, we need to be able to fund services for our residents.”