36 of 95 Tennessee Counties raise property taxes
The Tennessean
Thirty-six of
Local officials raised the taxes after the Legislature earlier this year
slashed state revenue subsidies to local governments by about $37 million. That
amount was a compromise of Gov. Phil Bredesen's
original plan, which sought a 9 percent cut that would
have amounted to approximately $61 million.
City governments lost the most at about $32 million. County governments lost $5
million, or less than 2 percent.
"My general feeling is that of the counties that did not have a property tax increase this year, the majority are going to be
looking at one next year," Bob Wormsley,
executive director of the Tennessee County Services Association, told
The Knoxville News Sentinel. "Just talking around the state with county
commissioners and county mayors, you'll hear them say, 'Well, we didn't raise
taxes this year, but we probably should have."'
Of the 58 counties that did not have a tax increase, most have either cut their
budgets or used reserve funds to avoid raising taxes, Wormsley
and other officials said.
Only eight counties raised property taxes in the previous fiscal year.
Tax information on the state's 345 city governments has not been completed. The
"Just scanning through the responses, the only thing we can say with any
certainty at this point is that there seems to be a widespread deferral of
capital projects and equipment purchases," said Ross Loder,
TML deputy director.
State Finance Commissioner Dave Goetz said the lost state revenue was
"inconsequential" to county governments but said the impact on cities
was still not certain. He also noted that counties benefited from about $105
million in new state money for education, including $27 million for teacher
salaries in school districts where pay was the lowest.
Local governments likely will not see subsidies restored to their previous
levels next year, Goetz said, but further cuts to state-shared taxes is not
being considered.
The loss of the state-shared tax money wasn't the primary factor in the
increase of county property taxes and the probability for more in the future, Wormsley said. All county governments fund school systems
while many city governments do not, he said, meaning they have fewer dollars
for other areas.
Counties depend on property taxes for most of their funding, especially in
rural areas. Urban areas benefit from local sales taxes where most residents,
including those from rural areas, spend their money.
The amount generated by a penny increase in the property tax can vary from
county to county.
If there are more tax hikes in the future for some counties, they may look much
like what
A 73-cent increase was initially projected for the county, but budget cuts and
debate during the past six months lowered that figure, McMahan said.
"We've looked at every scenario you can think of," he said. "We
looked at shutting down the county for a whole day. But that wasn't feasible."