published Tuesday, December 18th, 2012

Tennessee's county budgets are running in the red

It looks like quite a few Tennessee counties have been taking budgeting lessons from the federal government — and that might ultimately mean bad news for many Southeast Tennessee taxpayers.

A report released in late November by the state comptroller found that many counties have been consistently spending more than they are collecting in revenue. Tennessee's 95 county governments brought in more than $11.6 billion for the fiscal year ending June 30, 2011. Meanwhile, the counties collectively spent more than $12.1 billion.

That means, as a whole, Tennessee counties spent about $490 million more than they could afford last year.

This trend of deficit spending by counties is getting worse. Total county debt in Tennessee "increased almost $1.41 billion from 2007 to 2011," according to the comptroller's report.

While the report didn't name individual counties, a quick glance at county budget documents revealed that several county governments in our area are spending well beyond their means.

Bradley County, according to annual budget reports, will operate $8.5 million in the red this year. Last fiscal year, the county ran an $8.8 million deficit, making Bradley County's spending habits the most concerning and unsustainable in the region.

During the last fiscal year, Franklin County officials burned through almost $70 million, but took in only $66 million in revenue. This year, the county expects to generate more revenue, but not enough to cover a spending hike that will push the county budget to nearly $72 million.

Bradley and Franklin counties are not alone. Sequatchie County is operating more than $2.5 million in the hole this fiscal year. State records indicate that McMinn County spent about $1.4 million more than it brought in last year. In Grundy County, local leaders ran a deficit of approximately $870,000 in 2011.

Hamilton County is one of the few bright spots in the area when it comes to deficit spending. The county budget is balanced this year and has generated a surplus in two of the past three years.

The comptroller's report notes that the biggest cause for this surge in deficit spending is failing to make adequate payments to bring down county debt. The debt then snowballs, much like when a person only pays the minimum payment each month on a hefty credit card bill. As a result, when the principal payments come due, the county isn't prepared to handle the large payouts it owes.

Paying for expensive building and maintenance projects through bonds and other debt may seem like a great deal in the short term, but if the county can't afford to pay the bill when it comes due, services are slashed, county employees are cut and taxes are increased.

Even the smallest counties, the comptroller points out, are the size of very large businesses. These large businesses are responsible not to shareholders, but their taxpaying residents. It is necessary, for the well-being of taxpayer and the stability of county governments, that our Tennessee's counties begin to budget more responsibly.

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charivara said...

Keep moving folks. Nothing to read here. More of Mr. Johnson’s fearmongering and intellectually dishonest innuendo masquerading as principled concern over how much people pay in taxes.

“That means, as a whole, Tennessee counties spent about $490 million more than they could afford last year.” Actually, it doesn’t mean that at all. It means they spent more than they collected in taxes and fees. If you bought a $150,000 house and you make $60,000 does that mean you spent $90,000 more than you can afford? We have no idea what you can afford.

Do we know why counties spent more than they collected? Unforeseen tornado damage? More children in the school system? Unanticipated public works repairs? Or, as Mr. Johnson routinely tries to imply government “overspending” is solely a result of waste and inefficiency and on those who are undeserving.

Why could it be that the counties have to slash services and cut employees? Could it be that the general state of the economy (the results mainly to 30+ years of conservative economic policies Mr. Johnson want us to continue) has reduced county revenues? It has little to do with earlier bond issues or “overspending”. It’s like someone buying a new car when he has a job and then losing that job. Mr. Johnson would ask us to take him to task for buying a new car?

Equating government debt with credit card debt is a false equivalency. Government can always raise revenue to cover necessary expenses made for the public good, individuals cannot force their employers to pay them more if they spend more than they earn.

That government is like a business is yet another false equivalency. Government represents all of the people, a corporation represent only its stockholders. Government has the responsibility of promoting the general welfare, a corporation promotes only the welfare of its owners.

Corporations are created by the people, acting through their agent, the government. As such the government has the ability and right to limit the power, influence and wealth of the corporation. When the corporations control the government the general welfare invariably suffers. It is essential for the well-being of all citizens that they insist that government forces corporations to behave responsibly.

No one likes to pay taxes. But the conservative attack on taxes and government in general is a cancer on this society that, if not excised completely, will be the death of this country.

December 19, 2012 at 1:41 p.m.
dao1980 said...

But red is good right?.. We are a red state aren't we??

I don't guess our budget being in the blue would be much better.

December 21, 2012 at 9:26 a.m.
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