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The power of projection

Six jobs and several athletic programs were saved last week when school board members took an optimistic look at sales tax figures and raised its projected increase in revenues to around 2 percent – a move that allowed them to spend $117,000 more than they originally had in their budget.
With $255,000 in extra funding coming from the county, and $88,000 more in cuts, board members had $343,000 to use to reinstate items to the budget. More than $450,000 was added back in: $200,000 in coaching supplements, $140,000 for two athletic directors, $50,000 for two instructional assistants, and $60,000 for two nurses.
The budget originally projected a 1.5 percent increase in sales tax revenue.
Director of Schools Ron Dykes said it is more common to see sales tax projections raised in municipalities, rather than school districts.
“I noticed that the City of Johnson City used a simliar technique during this budget year to project more revenue,” Dykes said.
Dykes called the move “pretty rare in a school district,” but did note that in the past, Washington County has budgeted up to a 5 percent increase based on the state of the economy.
Although Dykes said he can’t speak for school board members, he said they may have taken heart from the fact that sales tax revenues have been above estimates for about four months now. If the revenue does not materialize as projected, cuts will have to be made or more money will have to be found, Dykes said.
At that point, the county will have a new mayor in office as well as 14 new commissioners.
County Mayor-elect Dan Eldridge said he isn’t worried about the school board’s move to raise revenue projections.
“They had [the projected increase] too low to begin with,” he said.
Eldridge said both the state and Johnson City have projected a 2 percent increase.
“[Two percent] is probably realistic,” he said. “I don’t think they’re going out on a limb at all. The state of Tennessee agrees. … If we are out on a limb, we’re not by ourselves.”
While Dykes called it “probably one of the easiest ways to balance a budget,” he said the responsibility to budget realistically still lies with county officials.
“You do have to be awfully cautious,” he said.
Elridge agreed, saying, “If you’re going to err, err on the conservative side.”
Sales tax revenues are one of the reasons the school system is in financial straits, having lost $866,000 from declining sales over two years.
“The money that has been promised to us by the county commission as part of our funding is sales tax,” Dykes said. “If it fails to produce the revenue the county projects, they have no other mechanism to replace that. [The school board’s move] is probably as safe as what [the county] has been doing.”
With no other money available to fund the school system, there have been several suggestions of raising taxes.
Eldridge said that won’t happen under his watch.
“I don’t want to raise taxes, but it’s beyond that,” Eldridge said. “We cannot raise taxes with the economic conditions that so many people in Washington County face today.”
While he said he was “really trying to be sensitive” to the schools’ situation, Eldridge said he will not do the wrong thing – raise taxes – even if it’s for the right reason – to fund the schools.
Fixing the funding sources will require a combined effort, Eldridge said, and results may not happen this year, but he’s optimistic for the next.
“My approach would be ‘let’s all come together,’” he said. “That’s what I wanted the budget process to be from the beginning, but it hasn’t exactly been that.”