State revenues climb, but local appropriations near even

By Thomas Wilson
star staff
twilson@starhq.com

  While tax revenues have grown substantially in the past two years thanks to a 1 percent increase in state sales tax rate, appropriations to city and county governments remain relatively static.
  Local legislators announced state appropriations for state services in Carter County and Elizabethton last week. Big ticket budget appropriations items for Carter County included $31.5 million for education and $32.8 million for health and social services.
  State Rep. Jerome Cochran said last week that he had hoped the appropriations could have included state shared revenues withheld from municipal governments by the states during the past three fiscal years.
  "We could have at least restored half the money back," Cochran said.
  The proposed budget allocates $23.7 million for the Carter County School District and $7.9 million for Elizabethton City Schools through the state's the Basic Education Program, which represents the major portion of state K-12 school funding. The county's share in the BEP was estimated at $22.8 million and Elizabethton's was estimated to be $7.3 million. The city's funding was essentially unchanged for the 2004 fiscal estimates.
  The During the 2003-2004 fiscal year, the department collected $9.1 billion in state taxes and fees. In addition to collecting state taxes, $1.6 billion of local sales tax was collected by the department for local governments during the 2003-2004 fiscal year. Tax revenues in the June 2004 exceeded $968 million - a jump of $109 million from June 2003 and $263 million over June 2002 revenues.
  The city of Elizabethton lost $115,000 in general fund revenues resulting from state-shared revenues being withheld. Revenues to the city of Elizabethton were essentially unchanged from the 2004 fiscal year. An amendment to the budget legislation returning the shared revenues to cities and counties was narrowly defeated in the Senate.
  Cochran said that while the governor had replenished the state's "rainy day" fund with roughly $200 million, the financial rain was already falling on municipal governments around the state.
  "That doesn't help the people now in Carter County or other people in the counties of East Tennessee," Cochran said. "I hope he will return that money back to the cities and counties where it belongs."
  The governor submitted his TennCare reform plan on Friday to the federal Centers for Medicare and Medicaid Services for approval. Bredesen's plan calls for new benefit limits and cost-sharing for 270,000 enrollees, with a goal of saving $1 billion a year in spending growth by 2008. TennCare provides health care for 1.3 million poor, disabled and uninsured Tennesseans, about a fourth of the state's residents.