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County faced with total teacher salary increase

Washington County schools closed the 2013-14 fiscal year with a more than $300,000 surplus and no use of fund balance.
“We are in the black again, and very proud of that,” Director of Schools Ron Dykes told Budget Committee members during their July 16 meeting.
The picture looks much different in the first draft of the 2014-15 budget.
During a review of expected revenue, Finance Director Beverly Thomas said the Basic Education Program estimates indicate $280,000 less will be received from the state this year. Commissioner Ethan Flynn asked the reason, and Thomas said it was due to lower enrollment.
Dykes then provided a breakdown of expenditures and new items needing financial support.
“The board has proposed a 2 percent salary increase for all personnel,” he said, adding the needed $1.3 million includes the required step increases.
Commissioner Mitch Meredith said he understood state employees and teachers were not receiving raises, and Dykes confirmed the proposed 2 percent was pulled from the governor’s budget.
“So if the state had mandated raises, Washington County might have been looking at paying 40 percent, but now we would be responsible for 100 percent?” Meredith asked, and Dykes agreed.
New expenses including a grant writer position, four intervention positions mandated but not funded by the state, and a maintenance position and three vehicles bring the budget deficit to $3.8 million.
“One of the things I would like to get my arms around next is the revenue picture,” Mayor Dan Eldridge said. “If you could update the draft based on your closeout numbers, I think that would be a good place to dive in deep and really get started.”
Thomas agreed to provide the current numbers, and another meeting will be scheduled.
Dykes asked for an update on the long-range facilities plan, which has an estimated cost of $115 million. Eldridge said the Budget Committee has not worked on the plan, but he has done some preliminary research that indicates approximately $100 million is the amount the county would be able to borrow.
“We do not have the bonding capacity to do the facilities plan the school board has recommended,” he said.
Eldridge said he has asked county financial adviser Raymond James to conduct an official evaluation of the amount that would be available based on the county’s current debt and the fact that revenue is flat due to no meaningful growth in the tax base.
Another consideration, according to Eldridge, is that the 2007 bond issue for two new schools has not begun to amortize, meaning the county still owes millions on the loan principal.
“If you add the $100 million (for the facilities plan), what you have done is taken away Washington County’s ability to issue debt for the next 15 years,” Eldridge said. “That’s something we have to think about.”
Even providing the requested raises would be a challenge. “A 2 percent increase in pay, which only paces inflation, is well over $2 million with Johnson City’s share, which translates to about a 7-cent tax increase,” Eldridge said. “This ends up being more than a 3 percent property tax increase every year just so teachers can pace inflation.”
Dykes said a meaningful dialogue needs to begin among the governmental bodies for a plan to fund education. Eldridge said the county can’t do it alone, and partnerships need to be formed with the City of Johnson City, East Tennessee State University and Northeast State Community College in order to take advantage of local resources.