Steve Gill Commentary: The City of Newbern Shows How to Manage A Surplus

 

Commentary by Steve Gill

With $2 billion in surplus and recurring revenue at their disposal this past fiscal year the Tennessee legislature jammed through a $300 million tax increase on fuel that provides a windfall to their road contractor and lobbyist buddies. This is the same Republican super-majority that has increased spending a BILLION DOLLARS PER YEAR the past 7 years while patting themselves on the back for being “fiscally conservative.”

They are the same politicians currently running around the state claiming they passed the “largest tax cut in history” without mentioning that the overwhelming majority of the “cuts” go to about 25 of the largest corporations in Tennessee. Is it really any big surprise that the bulk of the “cuts” went to some of the largest spenders on lobbyists and providers of donations to legislators? Perhaps it was just an amazing coincidence.

All the talk of “tax cuts” is just to distract voters from the truth: they raised fuel taxes by over $300 MILLION per year on families. Oh, they will say, but we cut the food tax. The food tax cuts amount to about $55 million per year, meaning the net loss to taxpayers, when balanced against the fuel tax increase, is well over $200 million per year. And the higher cost of fuel will add to the higher cost of transporting goods which will result in higher costs for food, clothing and everything else we buy. The illusory “food tax cut” will be wiped away with higher prices, but the fuel tax increase is REAL.

About three dozen conservative legislators rejected the idea of raising taxes while Tennessee enjoyed a $2 billion surplus, particularly since the need to repair and construct roads could have been done within the existing revenue stream. Some local officials have showed the same willingness to putting their conservative principles to work rather than just spouting conservative rhetoric at election time. For example, the little town of Newbern in West Tennessee, with a population of about 3500, is showing how real conservatives handle a surplus of taxpayer money.

Faced with higher than projected revenues the Board of Mayor and Alderman in Newbern passed a property tax CUT on June 20, 2017. Newbern had already avoided any tax increases for over ten years, and with a $4-5 million surplus the city leaders decided a tax cut would underline that businesses looking to locate in Newbern can count on a low tax approach from the City.

One of the reasons that Newbern operates so efficiently is due to the fact that the city owns and operates their own water, sewer and electric utilities and do so with the most affordable utility rates in the area. With an annual operating budget of about $39 million the property tax cut amounts to about two cents, or about $9,000 in reduction of annual revenue. It is not a large cut, but with Newbern already having lowest property tax rates in Dyer County, and one of the lowest in the area, it definitely sends a very loud message.

Newbern Mayor Justin Wright explains that it really wasn’t a difficult decision for the city leaders. “Though tax cuts are not an often seen occurrence, I think it is imperative to remember that if raising taxes is the right thing to do in a time of municipal hardship, lowering taxes for the citizens is the proper thing to do in times of economic fruitfulness,” Mayor Wright has noted. “Newbern has many projects in the coming years and, I firmly believe that our current trajectory will allow us to continue to make sure that these projects are adequately funded to their completion while we will continue to be strong financially for many years to come.”

Former Lt. Governor Ron Ramsey was always fond of saying “it matters who leads.” Those looking for the RIGHT kind of leadership should follow the lead of the City of Newbern.

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Steve Gill is a conservative media and political strategist and a regular contributor to the Tennessee Star.