Information in this June20 newsletter is from the office of Giles County Executive Graham Stowe.
This newsletter is an overview of our county’s financial big picture that Finance Office, Department Heads, the Commission and the School Board have wrestled with over the last few weeks - the FY 23/24 county budget.
Our fiscal year is closing June 30, and by state law we need to approve and forward the next fiscal year’s budget to the state comptroller.
There are two meetings coming on the way to approval: There will be a public hearing on June 27 at 9 a.m. in the Annex boardroom … this is an opportunity for members of the public to ask about the proposed budget. Then the commission meets Thursday, June 29 at 5 p. m. to approve the budget.
Let me start with a few thoughts on the reality of our county’s financial situation.
I’ll be very, very blunt. I haven’t liked what I’ve seen for several months, and the problem became much more evident as we worked on next year's fiscal budget.
The bottom line is the county is having the same budgetary problems as a lot of households - inflation is taking a bigger and bigger bite out of our budget. County revenues are going up a little, but county expenses are going up even faster. That’s not a good trend.
A perfect example revolves around the cost of insurance.
Most of us can relate this to the cost of insurance for our farm or home. As construction costs have skyrocketed over that last three years, so has the cost to insure homes and buildings. Let’s say that 3 or 4 years ago it might’ve cost $150K to replace your home - today it could very well cost $250K. That additional $100K in value ends up hitting our household budgets because it costs us more to insure a $250K home.
The same scenario has hit the county budget. Costs to insure our schools, our courthouse and other county buildings recently shot up nearly 80%.
First, it had been a few years since county buildings had been reappraised by the Local Government Insurance Pool.
The second factor is Tennessee government buildings that had to be rebuilt over the last couple of years after floods and tornados ended up costing a great deal more to replace than they were insured for.
These factors combined to increase the valuation of our county properties by $78 million. And since the value of our buildings jumped, our costs to insure jumped commensurately. In the next fiscal year, county government will have to pay about $230K more for insurance than last year.
I could give more examples of how inflation is impacting the county budget.
Just like all of us taxpayers, county government is paying more for electricity and fuel. Just like all of us, county government is paying more for tires and vehicle repairs, plus some big jumps in tipping fees to dispose of our solid waste.
And, in another similarity with household budgets - county government is seeing a huge jump in the food budget.
A lot of taxpayers may not realize that local tax dollars are what house and feed our prison population. Yes, a huge societal cost accompanies crime and criminals, and we the taxpayers bear that cost.
Inflation aside, I’m proud our department heads were able to trim and adjust their budgets to bring costs down as low as possible.
As an example, the Ambulance Service is coming in $36K under last year’s budget, and Emergency Management saved another $12K. Other departments made similar cuts.
We’re going to be able to get through this year in the black with a balanced budget, but it won’t be easy.
Because as I’ve mentioned a number of times, a lot of mounting reinvestment and maintenance needs require immediate attention.
I’m told that just the exterior renovations needed for our courthouse amount to $5 million. Meanwhile, inflationary pressures continue to compound, quarter after quarter, year after year.
And yes - I hear budget hawks telling me to take a chainsaw to this and an axe to that. However, I would invite the budget hawks to visit my office and review the budget with me. In the budgetary areas for which I’m responsible, there are no line items that can get the chainsaw or axe treatment.
Some sharp commissioners are also budget hawks, but they’re not finding any big cuts, either. And I also don’t see any services that can be cut.
Just about every service in county government is required by statute.
Writing about problems is the easy part: county government costs are inflating faster than our revenue streams.
We’re debt-free, but our courthouse needs immediate attention, and we’ve been talking about constructing a new ambulance building for more than a dozen years.
We’re renovating schools but soon we’ll have to plan on building some new schools.
There are no magical solutions. Oftentimes straightforward problems have straightforward solutions.
I haven’t been in county government for long but I do know the problems I’m bringing up have been recognized for years.
And everyone knows - problems never get better with time.
Unfortunately, when problems aren’t dealt with they morph into something else - they become predicaments.
A predicament is a tangled snarl of multiple interrelated problems. Predicaments don’t have simple solutions - predicaments have complex outcomes.
As I work on a strategic plan for the next 5-10 years, I’m grasping that there won’t be any straightforward solutions. The reason is the county has a lot of catch-up work ahead.
So, county leadership needs to shift our conversations to reflect this reality. We have to manage outcomes, and work to balance opportunities with risks.
I’m surrounded by good, smart people committed to stewarding county resources and getting some traction on our most pressing needs.
The county commission will grapple with these financial issues in the coming months, and I’ll be sure to keep everyone apprised.