Rutherford totters on brink of the budget hole on The Murfreesboro Post

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Rutherford totters on brink of the budget hole

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By: MICHELLE WILLARD, Post Staff Writer

Posted: Sunday, April 5, 2009 7:27 am

Rutherford County is facing a $10 million budget shortfall in the next fiscal year, not counting what Rutherford County Schools and a handful of other departments need for next year.

County Finance Director Lisa Nolen estimated a 20-cent increase to the property tax will be needed to balance the budget, unless the county can find money somewhere.

“There is not anyway you can cut $10 million out of the county general fund without compromising county services,” County Mayor Ernest Burgess said.

Burgess said the county will do its best to protect services like public safety, but cuts are going to be made.

A bulk of the shortfall comes in the form of salaries for county employees and rumors have been swirling about a possible 10 percent cut to all salaried workers.

Burgess said it’s not true. And even if all salaries were reduced by10 percent, it would only save the county around $5 million.

“I don’t think there is any practical way to cut salaries 10 percent,” he said.

But workers shouldn’t expect a pay raise this year, because of the budget situation.

“Passed that, there will be a close evaluation of all open positions and a close look at some filled positions,” Burgess said.

The county’s options for filling the budget hole are slim this year because last year, the county faced an $18 million shortfall and balanced the budget by raising the property tax, cutting employee pay raises and reducing in-service, training and travel expenses, along with office supply costs.

But still the budget was $6 million short. Now the county has no rainy day fund to dip into.

“We dug a hole and at some point it’s going to fall in on us,” Commissioner Rick Hall said about the county’s budget situation.

Declining tax revenues have also contributed to the county’s budget deficit. The development tax, building permits and interest earnings from investments have all seen declines during the current economic downturn and are down substantially compared to the last five years.

Nolen said fee collections alone are $1 million off what was projected for this fiscal year, especially fees tied to construction.

“All the fees tied to that are all down,” she said.

And don’t expect any help from federal stimulus funds.

Tennessee is set to receive around $2.1 billion over the next two years with most of it funding TennCare. Tennessee will receive about $172 million to cover the cost of general government operating expenses.

“While these are programs we technically administer in various ways, they do not directly affect the discretionary state budget except insofar as they improve the general economy,” Bredesen said at his budget presentation.

The stimulus package’s fiscal stabilization funds target state government and education mostly, with little to no money for local governments.

“As far as operating cost and reoccurring cost, there’s basically no benefit (to the county),” Burgess said.

Stimulus money will help the state fully fund education over the next two years, but will not plug the budget gap, he added.

Michelle Willard can be contacted at 615-869-0816 or mwillard@murfreesboropost.com.

Tagged under Economy, RuCo

Member Opinions:

By: MyVoice on 4/5/09
Rather than tax us homeowners yet again why not tax the people that are renting. They use county services as well as the rest of us. I am tired of having to pay extra.

By: Geana on 4/5/09
I had the same thought, except, the renters will be bearing the increases through increases from their landlords. In fact, landlords might have it better than private homeowners -- they can pass the buck to the tenants.

By: HuskyLover on 4/5/09
Passing a type of property tax on to renters makes no sense. It's the property being taxed- not the individual. Taxes ARE being paid by the property owner and the renter does pay via increased rent like Geana stated. Landlords do not make money off increased rent to cover tax hikes. Insurance for rental property is much higher than principal residences and you have to account for higher repair and upkeep costs. Also, if renters own cars or buy goods in Rutherford County, they're paying taxes via the Wheel Tax and sales taxes.

Government needs to cut its budget to the bone. I get so tired of hearing that they can't cut any further because it would compromise county services. Bull. County employees need to suck it up and push through it just like private entity employees do when the labor force is reduced. So what if you have to do the job of 2 people? If that's what it takes in today's economic climate then so be it!

By: WISEUP on 4/5/09
Don't look to me for increased taxes, I'VE GOT MY OWN PROBLEMS and I don't know of anyone to go to for help.
For get those new school projects and use that money, sueley you have that money or you wouldn't be thinking of building new schools.

By: hat4rack on 4/7/09
Something will have to be cut somewhere. Cut out a % of the county employees and services will be affected - maybe not as much as some say, but services will take a hit. Joe Citizen will have to be ready to swallow those losses -- you and I.

But I don't know that we're ready to accept less than optimum. One example to drudge up... parents and some school officials continue to push things like the building of new schools. We've lived too long having our cake and eating it too. Something's gotta give.

By: Alma228 on 4/7/09
Sell people tags, everyone must wear a bracelet with the current year sticker that they have paid their existence tax and a second sticker for the amount of air they breathe a year. This sounds fair.