ROGERSVILLE — Although Hawkins County’s proposed 2019-20 general fund budget is showing a surplus of nearly $200,000, some Budget Committee members said Friday that’s not enough to begin reducing the wheel tax.
On Friday morning, Finance Director Eric Buchanan presented the county commission with the first draft of that budget, which projects a surplus of $197,706. That’s a substantial improvement over two years ago, when Hawkins County was faced with a $2 million deficit.
The commission’s solution for eliminating that shortfall two years ago was a $40 wheel tax increase, which set the overall cost of tagging a vehicle in Hawkins County at $96.
Spending plan far from final
The new budget surplus might not last long because it doesn’t reflect pending funding requests.
On Friday, the Budget Committee met jointly with the full commission to hear budget requests from department heads and contributions recipients, a process that will continue Monday and Tuesday.
Commissioners are also being asked to consider a costly salary scale and/or cost of living increase for county employees, as well as proposed building and grounds improvements which have been on hold the past few years during the recent budget problems.
Budget draft by the numbers
Twelve of the 21 commissioners, including all seven Budget Committee members, attended Friday’s hearings.
Among the figures presented by Buchanan were:
Projected revenue for 2019-20 is $17.904 million.
Projected expenditures for 2019-20 are $17.706 million.
The general fund’s beginning balance as of July 1, when the new fiscal year begins, is projected at $6.169 million.
That figure includes $982,866 which is committed or assigned for specific purposes.
The total unassigned fund balance as of July 1 is projected at $5.384 million.
Is it time for a tax cut?
Following Buchanan’s presentation, Commissioner Danny Alvis suggested it might be time for the commission to consider a wheel tax reduction.
“We’re in pretty good financial condition, and with that said I’d like to go on record as trying to reduce the wheel tax $10, and if at all possible $15,” Alvis said.
Commissioner Rick Brewer seconded Alvis’ ambition to reduce the wheel tax.
“If we can reduce it at all, we need to”
“We don’t know if it’s doable until we try,” Brewer said. “We need to be open-minded about it because if we can reduce it at all, we need to.”
Some commissioners weren’t optimistic that the budget situation in 2019-20 will be optimal for a tax reduction.
Neither was Buchanan, who noted that a $10 wheel tax reduction would reduce the general fund revenue by about $530,000.
“Anytime that you reduce the revenue coming in, you’re going to see it directly affected on that (budget surplus/deficit) line,” Buchanan said. “A dollar on the wheel tax generates roughly $53,000, which will take that (surplus) to the negative. Also, you have not yet heard any of the new requests which will farther drive that number down, so I would be very cautious in doing anything that will take away from our revenues at this point.”
Budget Committee member Valarie Goins recalled that in 2014 Hawkins County had an $11 million general fund balance, and by 2017 it had depleted to the point that it was going to be $1.2 million without a tax increase.
“Protect that fund balance”
“We need to remember that sometimes we have to wait to reduce an expense or a burden to all of us until we’re at a point in time in our budget fund balance to do so,” Goins said. “As a wise man (her late father, Commissioner Virgil Mallett) once told me, ‘You’ve got to protect that fund balance.’ That’s very important.”
She added, “This (wheel tax cut) possibly is a positive political decision, but I’m not here politically. I’m here to look after the betterment of our county and our business, so to speak, because we are a business. Our county is a business.”
There are potential avenues for revenue increases which aren’t being factored into the 2019-20 draft simply because there’s no hard data on them yet.