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County looking at wheel tax plan

By Kayla Carter
Staff Writer
[email protected]
With a combined increase over last year’s budget of $750,000, the Unicoi County Commission is proposing a wheel tax referendum be added to the November ballot to supplement the property tax burden, which is currently calculated to see a 25-cent rate increase.
The commission has called a special meeting for Sept. 10 at 6 p.m. to discuss adding a referendum for a wheel tax to the November ballot.
Costs associated with the increase were described as “unavoidable,” by Finance Committee Chairman Loren Thomas in a document sent to The Erwin Record on Friday.
Thomas said increases include $100,000 for worker’s compensation, $131,000 for the 911 lawsuit, $77,000 for school resource officers, $10,000 for property insurance, $10,000 for each trial against former sheriff Kent Harris, $28,000 for four upcoming elections and $23,000 for health insurance.
Also factored into the budget shortfall was $151,000 for debt service, which Thomas said is for the new middle school. “The state increased the salaries of all elected officials, and there are many other smaller items that had increases,” Thomas wrote in the document.
The tax increase breakdown is 14 cents for property tax, five cents for debt service and six cents for the $181,000 fund balance increase.
A fund balance increase of $181,000 was suggested in order to retain it at a “safer level,” Thomas wrote.
The fund balance increase is a result of higher projected revenues than what were received last year, Thomas said on Friday. He said the fund balance was “depleted to a dangerously low” amount for the last fiscal year.
Phyllis Bennett, bookkeeper for the county mayor’s office, said the fund balance is currently at $52,225. She said the current general fund deficit, as far as projecting for the new year, is around $419,000, but more changes are to be made.
“Right now, if all revenues came in and expenditures were spent we would need $419,000 to bring us back to zero,” she said. “In the past, they have tried to leave us with about a $150,000 balance, so that if something comes in that’s not budgeted, we would have the money for it.”
Thomas said on Friday during a phone interview that the majority of commissioners who were in attendance at Thursday night’s finance committee meeting are in favor of a wheel tax, but they also feel adding a referendum for citizens to vote on would be the best way to handle the situation.
“The commission has decided that we will increase property taxes this year and not impose a wheel tax at this time,” Thomas wrote.
He explained his position on the wheel tax: “A wheel tax just spreads out the burden to more people, which means the majority of property owners are the ones that would get a break and pay less,” he wrote. “The people that rent or don’t own property, but drive, would have to pay the wheel tax and that would be something that they are not used to paying. They also currently enjoy all of the services such as the health department, ambulance service, etc. and they don’t pay property taxes to support those things. The property owners pay for it all.”
Commissioners James “Mickey” Hatcher and Doug Bowman are against the wheel tax.
During a phone interview on Friday, Bowman said he does not support what he calls a “new” tax.
“I am against a wheel tax because it’s a new tax that won’t go away,” he said. “It punishes people that have multiple vehicles.”
He said companies in the county that have upwards of 70 vehicles would fall under the tax and would create a bigger burden for them than someone with one vehicle. He also said the rules, which the state mandates, are unfavorable.
Some of the rules, he said, include: the inability to earmark the funds for specific costs like schools; a cap cannot be placed on the tax amount; and limits to the number of vehicles taxed cannot be implemented.
“The wheel tax a few years back was discussed at length,” he said.
Also, Bowman said there are costs associated with putting the referendum on the ballot as well as implementing the wheel tax.
“I wouldn’t support it,” he said. “The only way would be if it was voted in by the citizens.”
Thomas said on Friday the proposed wheel tax amount was discussed for $25 per vehicle owned.
Also related to county finances, the finance committee met on Thursday night to consider the budgets for the health department, animal control and emergency communications and also to finalize the assessor of property’s bottom line at $255,957.
On Aug. 28, the committee met to agree on the chancery court, University of Tennessee extension and the department of transportation budgets. The committee also took another look at the sheriff’s department budget in order to cut additional funds.
Unicoi County Mike Hensley approached the committee about purchasing two used vehicles as opposed to buying two new vehicles. The two used Crown Victorias were estimated to cost $17,700, while Hensley projected the cost of two new vehicles to be around $28,000.
Also during the meeting on Thursday, the committee requested that Unicoi County Trustee Paul Berry and Unicoi County citizen John Day be present to discuss a tax freeze for the elderly.