The Rutherford County Commission is heading into Wednesday’s meeting with a proposal to leave the property tax rate unchanged for Fiscal Year 2020.
The commission will meet at 9 a.m. Wednesday to approve the budget and property tax rate.
The Budget and Finance Committee on Monday night voted 4-3 to leave the property tax rate unchanged at $2.0994 per $100 assessed value. Previously, a tax hike of 20 cents, then 19.5 cents had been proposed.
Voting on a motion to leave the tax rate unchanged were: Paul Johnson, no; Steve Pearcy, yes; Robert Stevens, yes; Rhonda Allen, yes; Phil Dodd, no; Vice Chairman, Trey Gooch yes; Chairman Robert Peay, no.
Although the committee voted to recommend that the commission leave the tax rate unchanged, the full commission will have final say.
Voting 5-2 to adopt the amended budget were: Paul Johnson, no; Steve Pearcy, yes; Robert Stevens, yes; Rhonda Allen, yes; Phil Dodd, yes; Trey Gooch, yes; Robert Peay, no.
At the meeting, Rutherford County Mayor Bill Ketron said last year’s commission approved an FY19 budget that was “upside down,” meaning it was not balanced but drew upon the fund balance, or the county’s savings account. The new FY20 budget needs a 46-cent increase to balance, even though the budget committee had only requested a 20-cent increase, Ketron said.
“We don’t know what tomorrow brings,” Ketron said, adding that, “it’s not looking too good in the Middle East right now, which could dramatically affect” sales tax.
Ketron said the budget could be “more upside down” next year. He said he wants the best decision to be made.
Last year, the general fund balance was upside down $7 million in the current budget, County Finance Director Lisa Nolen said. The proposal for no tax increase leaves that balance upside down by $12 million. The school deficit will increase from $15 million this year to $21 million with no tax increase in FY20.
While revenues grow “some,” they do not grow like expenses, Nolen said.
The committee said that Nolen used “conservative” revenue estimates in the FY19 budget.
Stevens said, “If you give government more money, it’s going to be spent, we’re still going to be looking for more money next year.”
On Tuesday, Allen told the Murfreesboro Post she has anxiety about not proposing a tax increase this year, saying that failing to do so is kicking the can down the road.
“You can only deplete your reserves one time,” she said. “This will not be a solution next year.”
Although revenue estimates are coming in higher for now, there are road and school projects coming along. On Monday night, the committee recommended taking five cents out of the amount that is allocated to pay off debt service for capital projects. The school system continues to have needs, and the county is about to switch to a new communications system.
The commission on Wednesday will make its own decision, she said.