GALLATIN, Tennessee — After three years of county revenues exceeding ever-increasing annual budgets, the Sumner County Board of Commissioners by a vote of 21-3 adopted a property tax rate of $2.50 per $100 of assessed value, unchanged from last year, at their regularly scheduled July meeting.
The $2.50 tax rate, a greater than 20 percent increase over the $2.08 certified tax rate, originally implemented in 2014 by the then newly-elected County Commission in a controversial special-called meeting which immediately followed a special called Budget Committee meeting, met with much public resistance.
When the topic was added to a commission meeting agenda three meetings later, finally allowing Sumner County residents to speak on the issue, the county administration building was overflowing with protestors, with dozens making public comments against the tax increase and causing the meeting to go until after 1 a.m.
The annual budgets for 2016, 2017 and 2018 have projected county revenues to grow by more than 3 percent per year above and beyond the impact from the 2014 property tax increase. The total growth in revenues for the three-year period was conservatively estimated at $9 million.
The actual growth has far exceeded those estimates, yielding an additional $5.9 million, or 65 percent greater than the projected increase for a total three-year county revenue growth of $15 million.
The budget for fiscal year 2018, which started July 1, 2017, and runs through June 30, 2018, projects another 3.3 percent growth in revenues to $151 million, up from $148 million in fiscal 2017.
And, similar to the State of Tennessee, Sumner County has allocated the expenditure of the majority of its surpluses. Any flattening or downturn in the economy will create the need for a tax increase at a time that would hurt taxpayers the most.
According to its 2018 budget document, Sumner County Schools is set to receive an increase of $2.6 million from county revenues, in addition to the $5.8 million increase from the state.
The school system has budgeted increases of $3 million for pay raises, $2 million for medical and dental insurance premium hikes and $1.5 million for “teachers and additional staffing adjustments,” according to the presentation that accompanies the school system budget.
The same document predicts student enrollment for 2018 to be flat from 2017 at 29,200, which was an increase of less than one percent from the 2016 enrollment of 29,000.
County Commissioner Jim Vaughn (District 6), who has declared his intention to run for the position of County Executive, a seat currently held by Anthony Holt, was one of the three dissenting votes against the tax rate. In a statement issued to The Tennessee Star, Vaughn stated his reasoning:
My mission statement includes the promise that I will not support a tax rate that is greater than absolutely necessary to maintain a lifestyle that the citizens of Sumner County demand. The tax rate that was passed by the County Commission included enough debt service to fund $20 million of debt for the purchase of property for an industrial development park. The current County Executive included this money in the budget and has promoted the purchase of the property. Once the property is purchased there will be a plea for more money and greater debt to the county.
This $20 million of debt equals about 4 cents on the tax rate to pay the debt of approximately $1.6 million of annual debt to the county. Not only does this equate to an excessive tax rate, it is also fundamentally wrong for the county to enter into a business that competes against private sector business.
Other expenditures that is included in this rate is money to begin the construction of an event center that also competes with the more than 20 event centers that are privately owned and operated. These are businesses that must make a profit to exist. County subsidized event centers don’t have the requirement.
Keeping this money in the budget leaves the door open to greater debt and higher taxes.
Commissioner Moe Taylor (District 1), also voting no on the $2.50 tax rate, said “In Sumner County, we don’t have a revenue problem, we have a spending problem.” Taylor continued, “With the spending of this current County Commission and County Executive, it’s not a matter of if, but a matter of when we will have another tax increase.”
Taylor referred to the move of $0.2366 of the tax rate from Debt Service to Capital Projects, saying “it’s a positive in that Sumner County would be spending money it already has versus borrowing it.” The issue for Taylor is that it seems “back-handed to jack up the tax rate for the purpose of borrowing only to move it, rather than giving it back to the taxpayers.”