As budgets for the operation of Sumner County government and schools are set to be approved by the Board of County Commissioners at the regularly scheduled monthly meeting on Monday, June 17, the proposed spending plan will require an increase in the property tax rate.
While the amount of the property tax increase has not yet been established, it is clear through discussions by several of the County Commissioners as well as the County Finance Director that an increase is imminent.
A property tax increase would be the second for Sumner County in less than five years, with the last set into place in November of 2014. Both times, the property tax increases coincided with a property reappraisal which happens every five years in Sumner County.
All of Tennessee’s 95 counties are on a four-, five-, or six-year reappraisal cycle. Upon the completion of the appraisal of all properties in a county, no matter the length of the reappraisal cycle, the county’s Assessor of Property determines and certifies a property tax rate that provides the same revenue for the County as was levied during the previous year. This is otherwise known as a certified tax rate (CTR) or revenue-neutral property tax rate.
In effect, to maintain the same revenue to a jurisdiction, when property values go up, the certified tax rate will go down and, conversely, if property values go down, the certified tax rate will be raised accordingly by the County Assessor of Property. The actual property tax rate, though, is set by vote of the jurisdiction’s legislative body, that being the County Commission or municipal board.
In the 2014 reappraisal process, Sumner County’s Assessor of Property lowered property values still overstated from the 2009 reappraisal, which resulted in the certified tax rate going from $2.02 to $2.08.
Some of the Sumner County’s 24 Commissioners, along with Mayors from Sumner County’s seven cities, and lead by County Executive Anthony Holt protested to the state Board of Equalization over the handling of property valuation appeals by Sumner County’s Assessor of Property as well as his estimated certified tax rate.
Although the process with the state delayed the setting of a tax rate past the July 31 adoption deadline required by state law, the outcome did not impact the results of the certified tax rate.
Even the approval of the Sumner County Schools budget for the 2014-2015 fiscal year was delayed until September 15, 2014, after 10 new County Commissioners were sworn into office.
The property tax rate didn’t make it to any County agendas until a special-called Budget Committee immediately followed by a special called County Commission meeting on Monday, November 3, 2014 – the night prior to a national election.
While the intention to exceed the certified tax rate did appear in local papers, as required by state law, the amount of the proposed property tax increase did not.
However, the County Finance Director came into the back-to-back meetings with a presentation that included a recommended property tax rate of $2.50. The new rate represented a property tax rate increase of more than 20 percent, necessitated in large part by the Sumner County School budget which was passed nearly two months earlier.
Since the last property tax increase, the amount Sumner County has budgeted annually has grown by at least 3.2 percent and as much as 3.9 percent. However, Sumner County government has received additional revenues of at least 50 percent above and beyond the budgeted increases.
Going into this next fiscal year, which runs July 1, 2019 through June 30, 2020, even higher budget increases are accompanied by greater growth in government.
For instance, 15 new positions are being added, three of which are in the IT Department. The IT Department didn’t even exist in fiscal year 2017-2018, but it has grown to a $1.2 million budget for fiscal year 2019-2020 – representing about a 50 percent increase over last year.
The most significant single line item added to the 2019-2020 budget is the renovation of the Comer Barn at $3.5 million.
The barn, located on Nashville Pike adjacent to Sumner County Tourism and deeded to Sumner County by Rogers Group, has an unusual condition attached to it.
The deed requires that if the property ceases to be used on a regular basis for more than five years or is not renovated to a condition reasonably satisfactory to Rogers Group within five years, the company could take back control of the property.
It’s been more than three years since the deed was signed, and no work has yet commenced on the property. It is well known that the roof of the structure is caving in, thereby making it unsafe for use of any type.
While the budget includes this non-essential Comer Barn renovation, for the first time in at least 10 years the budget includes zero dollars for rural fire protection.
The service is provided by volunteers to protect the rural parts of the counties not protected by city fire departments. For the last several years, the allocation to each of the dozen or so Sumner County volunteer fire departments was $14,000. Last year, that number was upped to $24,000 each.
At the $24,000 rate per volunteer fire department – a total cost of $312,000 per year – the cost of the Comer Barn renovation would fund fire protection for the rural areas in Sumner County for the next 11 years.
Completely cutting the funding for rural fire protection from the budget is part of the reason for a property tax increase.
In addition, there have been no funding increases from Sumner County coffers to the Highway Department for several years, even as the cost of materials to maintain roads has risen.
There were two other reasons for a property tax increase offered by Sumner County’s Finance Director in a presentation he provided to Budget Committee members entitled, “Possible Narrative for Property Tax Rate.”
The first is to cover appeals from this year’s property reappraisal, which was estimated at a likely overstated three percent.
The second is capturing inflation over the past five years, estimated at an additional 7.45 percent.
The average increase in Sumner County property values through the five-year reappraisal process is estimated to be 35 percent.
To offset the 35 percent increase in property values, the revenue neutral tax rate that will be certified by the Assessor of Property is estimated to be $1.8519 from the current $2.50.
Adding in Sumner County Finance Director’s appeals and inflation percentages, his estimated tax rate is $2.0350. That’s an increase of $0.1831 or a 10 percent increase over the estimated certified tax rate.
That increase doesn’t include funding for rural fire protection or any increases for Sumner County’s Highway Department. Both of those items Chairman Chris Taylor told the Budget Committee he would address through amendments when the budget is voted on at the County Commission meeting.
The Sumner County Schools budget calls for its own increase in local (County) funding of $2.7 million.
The County General budget, which covers pretty much everything but the schools and the roads, is currently showing a gap of $7.8 million between revenues and appropriations. That gap looks to be addressed through a decrease in the County’s fund balance.
Of course, in the background are the two major capital construction projects of the Liberty Creek elementary-middle-high school complex located off of Long Hollow Pike between Upper Station Camp Creek Road and Latimer Lane as well as the new courthouse to be located in downtown Gallatin.
The projects have estimated costs exceeding $100 million each, and Sumner County needs additional revenues to expand borrowing capacity for the courthouse following the issuance of bonds for the first phase of the school complex.
Sumner County General, Highway and School budgets are set to be voted on at a regularly scheduled County Commission meeting, Monday, June 17 at 7:00 p.m. in the County Administration Building at 355 North Belvedere Drive in Gallatin. The meeting is open to the public and can be watched live here.
As the County Commission awaits the revenue-neutral certified tax rate by the Assessor of Property as the five-year reappraisal process comes to its conclusion later this month or early July, the County Commission is scheduled to approve spending Monday night that will pre-determine the amount of the property tax increase.
Also on the agenda for Monday night’s County Commission meeting is the controversial greenway project that is planned to go on top of the sewer line that will be located in a floodway to service the new school complex on land taken from the property owners through eminent domain.