County Sales Tax May Lower Property Tax

During January’s Full Court meeting, a work session was proposed to delve into the sales tax referendum for White County residents, and how the money would be spent. On February 2’s Committee meetings, commissioners sat down to figure out how exactly to spend revenue generated from Sales Tax should the referendum pass.

The four main issues that commissioners identified that the sales tax revenue were Property Tax reduction, Fire departments, animal shelter, and roads. In March, the Budget Committee shall try to pass a resolution that says how much the revenue will go to lowering property tax, contingent on the referendum succeeding. Early voting starts April 15, and the sales tax will be an item on both Democratic and Republican ballots.

As part of the work session, commissioners gave their input on the benefits to upping the sales tax, and more importantly, how to allocate the funds gained from the sales tax should it pass referendum.

Commission Chairman Derrick Hutchings said, “I asked for this meeting so we could discuss our thoughts on how to or how not to allocate the sales tax funds if passed. I feel like we need to have a united front on how we would potentially vote if it were to be passed, so citizens know exactly what they are voting on.”

Finance Director Chad Marcum gave some estimated revenues on the sales tax. The rough, conservative estimate was about a million dollars annually. Director Marcum did emphasize to the commissioners the potential volatility of a sales tax, however. He said, “It goes up and down with the amount of stuff people buy. And so, as a word of caution, property tax is a steady, consistent revenue stream. And so, transferring that to a volatile tax, you just have to be cautious in doing so to make sure you’re not putting all your eggs in one basket.”

Chairman Hutchings clarified for the audience that from the million dollars in revenue, it would be split with the school. Since one penny on property tax roughly equals $100,000, this means the Commission could have about five pennies to work with on lowering the property tax, while five pennies would go to the school system.

Commissioner Kyle Goff asked how the county has trended in terms of sales tax, and Director Marcum claimed that the revenue has been largely consistent.

Commissioner TK Austin voiced concerns about putting too much of the revenue to property tax. He said, “But we need to be careful about how much of that we take away from property tax, simply because you have employees that are still going to want a raise this year. With the budget we passed last year, there is nothing left to do the raise or anything extra for the employees. So that needs to be took into consideration too.”

There are other “pitfalls” that Commissioner Dakota White also brought to attention. Wheel tax, insurance, and employee raises are all matters that the revenue generated from a sales tax could help fix. Commissioner White said, “So instead of there being a grand shift in a whole bunch of things, this (sales tax revenue) could be utilized as a filler to get us more current.”

Chairman Hutchings believed that ideally most of the revenue could go towards lowering property tax, but that there are deficits in certain departments such as the Highway Department, Fire Services, and the Animal Shelter. He also pointed out that, “If we don’t give back some on the property taxes, it’s never going to pass, in my opinion.”

Commissioner Robert McCormick felt that at least half of the revenue should go towards lowering property tax. Commissioner White then pointed out the potential of saving some of the sales tax revenue for emergency moments. He gave an example of the school system having a large shift in student numbers. While it was agreed that a buffer could be wise, there was doubt that White County residents would trust the Commission with that.

“There is such a large distrust amongst the constituency with us and how we allocate funds or the lack of, and how we spend money,” said Chairman Hutchings. “A savings account that large on something, I agree is a good idea for the county, but it’ll never pass. The constituents would never go for it.”

Commissioner Cain Rogers pointed out, with the distrust, that the work session does not guarantee the way a commissioner may vote in the future on how to spend the revenue. For example, a commissioner may speak positively towards putting all five pennies towards lowering property tax, but then they may vote against that in the future. Chairman Hutchings agreed that nothing is guaranteed, but said, “An honest conversation with how we feel, I think goes a long way.”

There were also concerns brought up for the Volunteer Fire Departments, as most of their fire trucks are decades old. Due to the cost of even used fire trucks, Chairman Hutchings is not sure that the sales tax revenue could fix that immediately.

Chairman Hutchings then reiterated, “If we can get a united front, that we can put out there so the citizens know if they vote this in, this is what it’s going to be. And they choose to vote or not vote for it.”

Commissioner Goff responded, “I think fire, roads, and animal shelter, and property tax reduction. I think those are the four roads we could probably go down together.”

After Commissioner Goff identified those four problems, Chairman Hutchings asked the rest of the commission if those are agreeable to all present. Commissioner McCormick pointed out that if a mere five pennies were diced up between those four issues, the amount of money allocated to each might not be all that substantial, especially property tax.

Commissioner Rogers then suggested potentially passing an official budget resolution that says what the money will spent on, contingent on the sales tax referendum passing.

After this, commissioners agreed to have the Budget Committee make a resolution that says how many pennies will go towards lowering the property tax, so the constituents will know exactly what they are voting for.

February 20 will be the Full Court Commission for the month, on the third floor of the Courthouse. All Commission meetings are open to the public and streamed on their YouTube page at White County TN Commission.