Sullivan committee recommends property tax increase

J. H. Osborne • Updated Aug 15, 2017 at 1:22 PM

BLOUNTVILLE — Sullivan County’s property tax rate is officially proposed to increase more than eight cents for the budget year that began July 1.

With a state-set deadline looming 17 days away, the Sullivan County Commission’s Budget Committee took a small but major step toward developing the budget at a brief meeting Monday evening: The group voted unanimously to recommend raising the property tax rate about 8.5 cents.

They did so based on an oral presentation by Accounts and Budgets Director Larry Bailey about what the comprehensive budget document will likely look like once it is drafted.

The committee learned a few weeks ago that Sullivan County’s certified tax rate, set by the state, is about 11 cents lower than last year’s tax rate. That’s because of growth in the countywide property assessment due to a once-every-four-years reappraisal completed earlier this year. The state sets the certified tax rate based on what it would take to allow the county to generate the same amount of revenue as last year. In theory, it keeps a property owner’s tax bill close to the amount they paid before their property was reappraised.

But this year the county went into the budget development process with two big-ticket items already on tap: $140 million for a school facilities plan (which is shared with the city school systems in Bristol and Kingsport) and resolution of Sheriff Wayne Anderson’s 2-year-old lawsuit seeking more funding for his department.

Late last year, the Sullivan County Commission agreed to issue $140 million in bonds for the schools plan. And at that time it was estimated it would take nine cents of the property tax rate to pay debt service on that loan.

Mediation between Anderson and County Mayor Richard Venable led to Anderson’s $6.6 million lawsuit being settled for about $2 million (that’s about 5.4 cents’ worth of property tax, based on the new $371,000 estimated value of each penny).

For commission to consider a tax rate higher than the state-certified rate of $2.4652 (per $100 of assessed value), it must advertise it as a tax increase — even if it is equal to or below the $2.5754 (per $100 of assessed value) property owners within the county (including in the cites) paid last year.

The Budget Committee voted to recommend a tax rate of $2.55.

Bailey, answering questions from the Times-News after the meeting, said the county’s budget will include: about $5.8 million in new money for debt service on the school bond issue; another $2 million in new money for the sheriff’s department; will shift 5.5 cents of the tax rate from the general purpose schools fund to the county’s general fund; and for the first time be designed to end the practice of sharing school renovation money with the two city school systems — a move that gains the county budget about $1.8 million.

The latter change is possible due only to a court decision elsewhere in the state a couple of years ago, Bailey said.

The Sullivan County Commission is scheduled to meet for a monthly work session Thursday at 6:30 p.m. and for its monthly business meeting on Monday at 9 a.m. Both meetings are scheduled to be on the second floor of the historic Sullivan County Courthouse.

Bailey said the legal notice of a public hearing on the budget will likely be published in the Times-News this weekend. With the legal requirement of 10 days notice, that means the commission will need to meet in called session on or before Aug. 31.