Wednesday, July 8, 2015
Weekly Report From Lawrence County Executive
T. R. Williams/ County Executive
I’m hearing positive comments from many of you about these weekly reports on the financial condition of our county. While no one likes to hear negative news, I think it’s important that you understand what we’re facing – just like an employee would inform their boss about trouble at their workplace. As County Executive, I am your employee, and this is my report to you, my employers.
Lawrence County cannot afford to carry on another year without raising revenue or significantly reducing services. As I said last week, about a million dollars of expense has been cut from proposed budgets already, and more reductions would have a negative impact on local families. It’s not the route anyone wants to take.
County government has several sources of revenue, including a portion of the sales tax that’s collected in Lawrence County; business taxes; license fees; court costs and penalties; payments for housing state inmates; wheel tax and property tax. The last two are the only sources that the County Commission has some control over.
With those two options before us, County Commissioners are considering ways to spread the impact out over the greatest number of people. Most citizens who have expressed an opinion consider a wheel tax increase much fairer than a property tax increase. Almost every adult owns at least one vehicle, but everyone doesn’t own property.
The Commission is calling for a special election that gives registered voters a chance to say yes or no to an increased wheel tax. Before you make up your mind, I think it’s important to clear up a few misconceptions.
True or false: The wheel tax was created as a temporary tax.
FALSE. The existing $25 wheel tax was established in 1984 to pay for school debt. After the 30-year bonds issued in 1984 for a school building project were paid off, the funds have been applied to other school debt. We will always have school debt, and the $25 wheel tax will always help pay for it. The private act through the state legislature that established the original tax guarantees that.
True or false: The Amish do not pay wheel tax.
TRUE. Tennessee Code Annotated 5-8-102 states that “Each county is empowered to levy for county purposes by action of its governing body a motor vehicle privilege tax as a condition precedent to the operation of a motor vehicle within the county. The tax may be levied on any motor vehicle taxable by the state.”
Since they are not motorized, Amish horse-drawn buggies are exempt from the wheel tax. Also exempt are other wheeled, non-motorized things like trailers used by businesses and residents to haul everything from horses to logs to fishing boats. So are campers and farm implements that are pulled by other vehicles. That’s state law, and the state legislature would have to change it.
True or false: Higher property taxes only affect property owners.
FALSE. The amount of new wheel tax increase that’s tentatively proposed is $70. It would take a 45-cent property tax increase to create an equal amount of new revenue. Raising our property tax from $2.74 to $3.19 would make our rate the sixth-highest in Tennessee and would be very unfavorable to potential business and industry. It would be a huge disadvantage to Lawrence County’s future growth.
True or false: A $95 annual wheel tax is huge. It’s overwhelming.
TRUE AND FALSE. Everyone knows this is a big increase, but sadly, that’s the amount needed to address the county’s financial problems. If you own two cars, that’s $190, $140 more than you’re paying now. The increase breaks down to about $2.69 a week; less than most sandwich-fries-and drink meals at fast food restaurants.
The county has been experiencing deficit spending over the past few years due to the loss of tax revenues and increased cost due to inflation and added services. As a result of the deficit spending, the fund balances were used to balance the budget. That’s like using your savings to pay bills if your income doesn’t cover them. Sooner or later, that catches up with you, and that has caught up with us.
I will be presenting more information next week about the special wheel tax referendum. When our budget issues are settled, I look forward to reporting the many positive things going on in Lawrence County, which far outnumber the negative.
