Counties could see property tax increase

By Stephen S. Glass

Star Staff

   Counties statewide are facing the prospect of increased property tax next year if state legislators continue to delay tax reforms, according to information released last week by the Tennessee County Services Association and the University of Tennessee's County Technical Assistance Service.
   Legislators in Nashville earlier this year agreed to freeze all shared funds to counties in fiscal year 2003 if Tennessee's growing revenue deficit cannot be remedied by then.
   Carter County Executive Truman Clark said Friday that the General Assembly has already voted to do just that.
   "It's already been passed in the Legislature," said Clark. "Of course, they will have to vote on it again. I'd like to think that they won't do it. But if they do, it's going to shift the whole tax burden back onto local governments."
   If that happens, said Clark, counties across the state will face staggering property tax increases in order to continue basic services locally.
   Lt. Gov. John Wilder said Wednesday that the General Assembly will be forced to raise taxes this year to make up for decreased revenue, possibly before the next regular session in January. According to Wilder, the state is facing a revenue shortfall this year of $300 million -- and next year's deficit could be as large as $1 billion.
   "Big cuts are coming if the General Assembly doesn't do something soon," said Clark.
   Already this year, Carter County has seen diminished state funds for schools and roads. According to County Highway Superintendent Jack Perkins, state money for paving and road maintenance was cut by 17 percent in September. Schools have had 75 percent of funds for after-school programs frozen indefinitely. These cuts may seem minor, but according to the CTAS report, further legislative inaction could hold apocalyptic consequences for local government.
   TCSA Director Bob Wormsley said that if legislators freeze all shared funds to counties next year, some counties face the unsavory prospect of raising property tax by as much as $2.50 per $100.
   A statewide average increase in property tax of 36 cents is expected if the Legislature does not share funds, Wormsley said.
   According to the CTAS report, Carter County would need an increase of 58 cents in property tax to replace all state-shared revenue. Figures show that the county would be deprived of more than $2.4 million, or 24 percent of its annual operating budget.
   Clark said that counties statewide would likely file joint action against the state if legislators go to such drastic measures. According to the state Constitution, it is unlawful for legislators to withhold shared funds for mandated programs, Clark said.
   In Nashville, Wilder said that senators continue to look at tax reform options -- including an income tax -- but that so far they have not been able to reach the consensus demanded by Gov. Sundquist to call for a special session.
   Wilder said a special session may be called before January.
   "We will do something," Wilder said. "And it will be right when we do it. Some kind of tax increase will have to be had."