Van Buren Tax Increase Will Be Difficult

The Vice Chairman of the Van Buren County budget committee said passing a property tax increase this year will be difficult to nearly impossible.

Commissioner Henry Seamons said after raising taxes last year, a further tax increase has very little support among commissioners.

“I told the comptrollers this,” Seamons said. “We had a property tax increase last year of 38-cents. I don’t know if a 10-cent property tax increase will pass the county court. We’re hoping to avoid that with some of the cuts we make, but we’ll have to wait and see.”

The State Comptroller’s Office estimated Van Buren County could face a $709,000 shortfall at the end of next fiscal year. Numerous steps are being considered to address the problem. The county has already cut over $500,000 from the budget, laying off 10 county employees in the process.

Seamons said Van Buren County faces the same issues other Upper Cumberland counties face. He said rural counties have to rely on heavily on property tax revenue in place of low sales tax numbers.

Budget Committee Chairman William Maxwell said he believes unrealized revenue and unanticipated expenses are partly to blame to the county’s financial problems. He pointed to Van Buren’s new jail as a source of concern. He said expected revenue from housing state prisoners has been lower than expected.

“Van Buren County constructed a new jail and moved into the facility in July 2018,” Maxwell said. “Correction staff was doubled due to the sheriff statement of need to operate the new facility. The new positions were expected to be supplemented by state inmates to be housed at our facility at $39 dollars-per-day. This revenue has been under realized as we are not housing the number of inmates that was expected by the budget committee.”

Tennessee’s Deputy Comptroller Jason Mumpower told Van Buren County Commissioners last week they had to take the budget issues seriously. He said officials were sending mixed signals to the public. Maxwell admitted that Mumpower is correct that the county has had missteps in managing money, but he said he believes with the county struggling, risks have to be taken.

“Mistakes were made,” Maxwell said. “No one has ever denied that. Yes, funds were moved from a restricted account. However, Commissioners, Mayor, and staff were not aware at the time that this transaction was restricted and not allowed. We understood that proper paperwork had been filed and approved. The purchase that was made with the described funds were for the BDS Site. This purchase was made in an effort to allow a waste-to-energy company to locate in our county. With the opportunity of revenue and jobs that were presented, the commission felt is was worth the investment. If we are willing to take no risk, we can never expect to grow.”

Maxwell said the state is also partly to blame for Van Buren County’s ill financial health. He said the state’s decision to demolish the Inn at Fall Creek Falls State Park in order to build a new facility led to a huge loss in county revenue.

“We lost Hotel/Motel Tax and Sales Tax from this operation that was demolished,” Maxwell said. “As a result of the closing of this operation, the state budget allowed Van Buren County $160,000 in fiscal year 2019/20 and $200,000 in fiscal year 2020/21 as replacement for the lost revenue, but that payment is set to expire at the end of fiscal year 2020/21 with no projected opening date of the new facility. This lost revenue must now be absorbed by the county.”

Mumpower praised Maxwell and the Budget Committee for the work that has been put into the budget. The Comptroller’s office has worked with county officials going line-by-line through the budget.

“The Budget Committee is committed to overcome the obstacles ahead and strengthen the financial health of the county,” Maxwell said. “As tax payers, we must remember that we have a constitutional obligation to provide some services in the county. If we are not willing to pay for a level of service, we must deal with inconveniences.”

More layoffs are possible, as well as an increase in property taxes to help manage the shortfall. Van Buren County passed a Wheel Tax not to exceed $30 in February 2019, but that measure was struck down in a special referendum later that year.

Commissioners resume budget work Thursday.