Comptroller: ‘no balanced budget, no spending privileges’
Published 12:01 pm Tuesday, August 15, 2023
Claiborne County government was faced with some hard truths during its latest special meeting as representatives from the Tennessee Comptroller’s Office elaborated on the facts facing the county if it does not adopt a budget by Aug. 31.
“If you don’t rise to the occasion to pass the budget, we will not hesitate to make those decisions for you, but you’re not going to like them,” said Bryan Burklin, Assistant Director; Local Government Audit from the Nashville headquarters of the Tennessee Comptroller. “You will lose your authority to be a sovereign government to govern yourselves.”
If this happens, Claiborne would have the infamous honor of being the first county in the history of Tennessee to relinquish the reins to the state.
Burklin said the county would be unable to spend any money or to operate at all after Aug. 31, if the budget is not adopted and a tax rate set.
“That applies to all general government functions and the highway department,” he said.
According to Burklin, a state law adopted in 2016 calls for an “automatic operation for school departments” at a “minimum required level.” This would include any proposed spending increases during the current year required by the State Department of Education.
“The Comptroller has advised me to warn you that, beginning Sept. 1, if there’s no budget in place, the Comptroller will have to approve any and all expenditures made by the county. If you plan to cut a check on Sept. 1, we need to approve it first. And we will continue to require that approval every Friday until the budget is in place,” said Burklin. “It would be a stain on the reputation of Claiborne County and not a place you want to be. The Comptroller will not just come in and mandate a tax increase. He will direct you to cut all the discretionary money in your budget. That would be things like all your contributions – none of those are required spending and would go first thing. Any proposed expenditures would go by the wayside. Any county departments not required by state law – and it could come to eliminating any nonessential personnel as well.”
Under state law, an unbalanced budget would require the financial axing of among others the various volunteer fire departments and libraries. Burklin said if the Claiborne County Public Library is financed as a county entity, it would be closed as a nonessential county department. Otherwise, only the charitable contributions to the Library would be cut.
County Mayor Joe Brooks has vetoed a resolution that would have given back “five cents” from the tax rate to the school district. Each penny currently equals $67,680 in real money. It was initially handed back to the schools because of recent funds allocated to the Claiborne Sheriff’s Office to pay for School Resource Officers.
Brooks is now gunning for “excess” funds sitting in the school coffers generated by the local option sales tax.
“You all could essentially cut $500,000 worth of pennies from the school system because they are in excess of their budget by $1.5 million. The obligation is with the maintenance of effort with the school system. Since they received more than they budgeted, you all (the commissioners) could take back money in the form of (tax rate) pennies and they would still have the same maintenance of effort that they had in the previous budget year,” said Brooks.
Burklin said that maintenance of effort is a budget-to-budget comparison.
“As long as you increase the estimate for sales tax in the current year to make it balance with the property tax taken away….and it needs to be a reasonable amount,” he said.
Claiborne School Board member Linda Fultz took exception to the proposal.
“It’s been how many years since we asked to increase our school budget? We do the maintenance of effort as far as not increasing our expenditures. So, we know not what the sales tax revenue is going to be. So, we underestimate. There would be no incentive, going forward, for us to go with a lower budget if that’s going to cost us. When any other department has increased the same costs, we do too, but we manage those costs. We feel like if we’re managing our costs this well, then there’s other areas you all need to manage,” said Fultz.
“It doesn’t cut your revenue. All it does is keep your maintenance of effort to what it was last year. I’m not saying we’re cutting your budget by anything. It’s just simply moving pennies from one side to the other and your maintenance funding is the same as it was last year,” said Brooks.
Fultz said that if sales tax income is going up, the school system’s income should go up.
“And it is,” said Brooks “through the local option sales tax because you’re banking $1.5 million last year and you banked (about) $1.2 million the year before and your pennies didn’t decrease.”
Early into the meeting, Commission Chairman Mike Campbell asked to speak.
“Since June, we have passed three different times, the appropriations resolution. We’ve passed contribution resolutions, with amendments, three times. The resolution to fund those appropriations and charities failed three times. I just want the audience and the comptroller to be aware of it. We have tried since June to come to a happy medium but we couldn’t do it.”
Budget negotiations began in early March. The nine-member budget committee presented to the full 21-member commission its proposed budget in June for adoption. Several tries at setting a property tax rate has failed.
The next Claiborne Commission meeting on Aug. 21 will include a proposal via resolution to set the tax rate at $2.25 per $100 of assessed value. In recent history Claiborne County has carried a tax rate of $2.58. This changed when the county dropped the rate to just $2.00 per $100 of assessed value.