Skip to content Skip to left sidebar Skip to right sidebar Skip to footer

County looks at 23-cent tax increase

Washington County commissioners will be asked to consider a 23-cent tax increase to create a funding pipeline for a list of capital projects, a decision that must be made by Sept. 30.
“Because of the county’s limited capacity to borrow on top of the $150 million in outstanding debt, we cannot respond to these needs in the manner we have traditionally,” Mayor Dan Eldridge told commissioners during Monday night’s meeting. “Approving projects on a first-come first-served basis and issuing bonds or capital outlay notes to cover the cost without consideration of timing and cost of other needs is irresponsible.”
Budget Committee members reconvened for the second time, following the full commission’s meeting on Aug. 24, during which the board was presented with two funding options for a proposed 10-year capital investment plan.
Six alternatives were originally considered by the Budget Committee last week in an effort to identify a long-term plan recognizing the county’s short-term limits as far as bonding capacity.
“Our needs don’t just all of the sudden appear,” Commissioner Mitch Meredith said. “The prudent thing is to start looking forward.”
As the county’s director of finance and administration, Meredith said he looked at a multitude of alternatives to develop the following six options to fund the $106 million list of capital needs:
Alternative 1
Finance $150 million in new debt using 20-year Education and Public Works Bonds, and 8-year School Bus and General Government Bonds. No tax increase. Funding for Boones Creek K-8 and Jonesborough K-8; three years of school buses; other school capital projects; Knob Creek Road improvements and extension; improvements to county-owned facilities; Public Safety radio system; computer system for county offices and courts; Industrial Park access and grading.
Alternative 2
Finance $102 million in new debt using 20-year Education, Public Works and Rural Bonds, and 8-year School Bus and General Government Bonds. 13-cent tax increase for property owners in city; 44-cent tax tax increase for property owners in unincorporated rural areas. Funding for Boones Creek K-8 and Jonesborough K-8; three years of school buses; other school capital projects; Knob Creek Road improvements and extension; improvements to county-owned facilities; Public Safety radio system; computer system for county offices and courts; Industrial Park access and grading.
Alternative 3
Pay-As-We-Go plan. 46-cent tax increase for all property owners in Washington County. Delay Boones Creek K-8 until 2020 and Jonesborough K-8 until 2024 while funding accumulates. Other school capital projects and general government projects funded in priority order with available dollars.
Alternative 4
Finance $121 million in new debt over 20- and 8-year terms. 23-cent immediate tax increase for all property owners in Washington County, with additional 11-cent increase in 2020, and additional 4-cent tax increase in 2022. Funding for Boones Creek K-8, but Jonesborough K-8 delayed until 2021; funded at different intervals over 10-year period are three years of school buses; other school capital needs; Knob Creek Road improvements and extension; improvements to county-owned facilities; Public Safety radio system; computer system for county offices and courts; Industrial Park access and grading.
Alternative 5
Finance $87 million in new debt over 12 years. 29-cent tax increase for all property owners in Washington County. Funding for Boones Creek K-8 and renovation of Jonesborough Elementary and Middle schools; funded at different intervals over 10-year period are three years of school buses; other school capital needs; Knob Creek Road improvements and extension; improvements to county-owned facilities; Public Safety radio system; computer system for county offices and courts; Industrial Park access and grading.
Alternative 6
Finance $76 million in new debt over 20- and 8-year terms. 29-cent tax increase for all property owners in Washington County. Funding for Boones Creek K-8 and renovation of Jonesborough Elementary and Middle schools; funded at different intervals over 10-year period are three years of school buses; other school capital needs; Knob Creek Road improvements and extension; improvements to county-owned facilities; Public Safety radio system; computer system for county offices and courts; Industrial Park access and grading.
There was opposition from some Budget Committee members regarding the alternatives that propose renovation of the Jonesborough schools rather than construction of a K-8.
“If we’re not building a new Jonesborough school, we’re wasting our time,” Commissioner Todd Hensley said.
“I don’t want to throw money down a hole,” Commissioner Joe Wise agreed.
An inter-local agreement may be proposed to Johnson City that would direct a portion of shared school funds to the Knob Creek Road project after the system’s $14 million capital needs are met. Eldridge noted the city would benefit from the economic impact that would result from development of the road.
Budget Committee members voted to present Alternatives 2 and 4 to the full board for input during the Aug. 24 meeting.
While no action was taken, Commissioner Lynn Hodge spoke in favor of a capital investment plan. “This is the beginning of what we need to do to get debt free by 2037 or sooner,” he said. “If we had done this 10 years ago, we could have built these schools with cash. Debt financing for capital projects will pay off for every taxpayer.”
Other commissioners had a problem with approving funding before selecting the projects, something Eldridge said will not affect the review and approval process by the board. “What has been clearly communicated is it’s the same list of projects for all alternatives,” he said during the Budget Committee meeting. “My concern is if you want to pre-identify the projects and how the money (related to school projects) will be shared, you need to stop talking about it because you’ll never get there.”
Wise pointed out the funding alternatives were given to the Budget Committee only five days earlier. “It’s going to take me longer than that to raise taxes,” he said.
Commissioner Joe Grandy said he had received no positive feedback on the alternative including a larger rural tax increase, and made a motion in favor of funding the capital investment plan using Alternative 4. How the 23-cent increase is spent will be determined by the full commission.
“This gets us moving forward on a revenue source to deal with the capital projects we have to fund immediately,” he said.
The motion was seconded by Commissioner Rick Storey and passed with Wise abstaining.