"Oh, and by the way, the prices at the grocery store have gone up. How are people going to live?"Well, we could shift the burden to those who can afford to offer up a little more than those who are poor, stop some of the tax breaks to corporations, and shift priorities to fighting wars on the domestic front - wars on poverty, wars on homelessness, wars on .....come to think of it, maybe we ought to call it something else besides "wars," since we don't seem to fare well in wars....
Budgets put heat on local officials
Lower sales tax revenues, higher costs cut resources
Spring Hill resident Charlie Schoenbrodt looks back fondly on the city's more prosperous years, when government officials reduced the 45-cent property tax to 19 cents and eliminated it all together in 2005.
The extra money in his pocket came in handy as gas prices rose and groceries became more costly. Money was tight — and still is — and every bit helped.
"A lot of people moved here because it was economically feasible," said Schoenbrodt, who moved 11 years ago to Spring Hill to work with automaker Saturn. He is now retired.
But now, cities and counties are beginning to feel the strain of high fuel costs as well as lower sales tax revenues.
As local officials in Spring Hill and other Nashville-area cities crunch numbers to finish budgets for the upcoming 2008-09 fiscal year, they see a recurring theme: more expenses, but less money to spend.
That trend could have an effect on residents' wallets.
To balance their budgets, cities and counties need to find extra dollars, which could come in the form of higher property taxes and service fee increases, or cuts in services.
Cities have just over six weeks to finish their budgets and decide what action to take. The fiscal year begins July 1.
"Tough times have hit families and tough times have hit governments," said Williamson County Mayor Rogers Anderson. "We just all have to learn to tighten our belts and work together."
Property tax back in play
In Spring Hill, the Board of Mayor and Aldermen has proposed a $21 million budget, which is at least $1.7 million short of balancing. The board has flirted with the idea of reinstituting the property tax, at 40 to 60 cents per $100 of assessed property value. That would mean a tax of $800 to $1,200 on a house and lot assessed at $200,000.
The city also has to repay nearly $800,000 a year for the next five years to the water and sewer fund. In past years, money had been moved from that account into the general fund to help deficits.
The news is not pleasing to residents such as Schoenbrodt, who sees a lot of retired people and young families who are on fixed budgets. He said tough fiscal times combined poor management of the city could cost residents.
"It is costing people more to drive to work, and they have a city that says they were going to add 40 to 60 cents per $100 value to our houses," Schoenbrodt said. "Oh, and by the way, the prices at the grocery store have gone up. How are people going to live?"
Spring Hill officials will have to make a decision soon on the property tax. They have been putting together budgets that include and leave out that tax, said Mayor Danny Leverette.
"My personal take is that the with the economic situation the way it is, the sales tax is not going to be enough as far as everyday operating expenses," he said.
Leverette does not want to resort to layoffs, the avenue some governments have traveled. Metro Nashville, for instance, will lay off 200 city employees.
"We could have to cut back our services, which are bare-bones right now," he said. "We are also looking at increasing water and sewer rates, other permits and regulatory fees."
Sumner County officials who have to deal with a $5.5 million shortfall also could have to consider a property tax increase, and possibly raise the rate from $2.28 to $2.43 per $100 of assessed value, but elected officials are trying to avoid that, said Rachel Nichols, finance director for the county.
"So far the budget committee has not decided what path they would choose to get our budget in balance," Nichols said. "A tax increase has been mentioned, but several of the commissioners are adamant that they do not want to raise taxes, and they prefer to make cuts."
Some communities may resort to fee increases. Rutherford County increased the litigation tax for people filing cases in court from $10 to $25. The increase is still is in the paperwork phase and is likely to take effect next year, said Lisa Nolen, finance director for the county.
"Along with gas and a slowing economy, for us, we are also getting ready to open new facilities," Nolen said. "Adding personnel to staff those building is another impact on our financial situation."
Rutherford is in the middle of the budget process and hearing, and is looking for ways to close an $18 million gap in the budget.
The county has budgeted $388 million in expenditures, but expects only about $370 million in revenue.
Nolen said county officials are not considering a property tax increase right now. They are considering what else can be cut that is non-essential to everyday operations.
"We are trying to find more cuts — for example travel, data processing supplies/office
The city of Franklin is in the midst of its budget process, but as officials add the numbers they are seeing that a slowing economy is taking a toll — even more than fuel costs, said Mayor John Schroer.
People are spending less money, which mean less sales tax revenue. Fee increases may have to fill the void.
"We looked at raising the hotel/motel tax by 1 percent," Schroer said. "We are looking at raising fees for solid waste removal. There are several ways to generate income, but nothing is set in stone."
Fuel costs hit hard
Fuel costs are hitting city and county departments, especially school districts, particularly hard. Several have dipped into reserves to keep fuel in buses and emergency vehicles.
"It's going to be a challenge for our schools, our board and county commission," said Mickey Hall, deputy director for schools in Wilson County. "Costs keep rising."
The school district budgeted $750,000 toward fuel for next year. That's almost double what was budgeted for the current year, and school officials recently had to approve $175,000 to make it through the rest of the year.
The city of Brentwood is having the same problem trying to figure out how much money to expense for next year for fuel, said City Manager Michael Walker.
"We've budgeted $380,000, but we may have to increase that by another $50,000 to $100,000," Walker said. "It's crazy when you put together a budget in April and the prices have already changed. Right now, everything is a moving target."
Williamson County saw a 30 percent increase in fuel costs over last year's budgets. They do not expect to raise property taxes, said county Mayor Anderson.
"That doesn't mean we don't have issues," he said. "Williamson County is not immune to any that is going on just like the rest of the state and even the nation. Each department will hold their budgets at status quo."
The cities of Gallatin, in Sumner County, and Murfreesboro, in Rutherford, are among a few that have a balanced budget.
Gallatin is unique because the city has a $5.8 million surplus that will go into its reserve fund and could be appropriated later if needed with a majority vote from city council, said Matt Stewart, city finance director.
City officials are being conservative with the upcoming year's budget for fear that the tougher economic times might reach Gallatin.
"We've got healthy reserves, but we are still operating real conservatively,
Murfreesboro has seen extensive growth in the commercial sector as retail spots in their burgeoning Gateway area fill up.
The city has proposed a balance budget of $93.3 million.
Officials there said thinking ahead helped them prepare for current tough economic times.
They asked city department's to cut non-essential items after gas prices started going up after Hurricane Katrina, said city spokesman Chris Shofner.
"We asked departments to cut off engines when idling and cut down on travel," Shofner said. "We're not doing anything rash, but who knows what could be in the future if things don't get better — for everyone."
Contact Christina E. Sanchez at cesanchez@tenne
