No tax hike in Shelby County budget
Shortly after midnight Tuesday morning — and after months of wrangling — Shelby County commissioners passed a budget to take them through 2021. The county will not see an increase to either its property tax or its vehicle registration fee, commonly called the wheel tax, this year. And commissioners managed to whittle down the budget to use only $9.5 million of their fund balance, sometimes referred to as their "savings account," to plug a budget deficit. That $9.5 million will leave the fund balance at 19% of the county's revenue, just below the minimum of the county policy, which is to maintain an unassigned fund balance in its general fund of 20-30% of revenue in order to provide cash flow for operations throughout the year. However, commissioners had earlier discussed using up to $16 million from the fund balance in order to plug a gaping hole in the budget. Managing to only use $9.5 million was "pretty amazing," said Commission Chairman Mark Billingsley. "So we have a budget. I feel like we ought to send off a fireworks show," Billingsley said at the meeting, which began Monday afternoon and ended shortly after midnight Tuesday. But county officials acknowledge they will still have to face budget difficulties down the road, and they had to make steep cuts in order to create a balanced budget without a tax increase. This year's budget had about $15 million in cuts, but also included new expenditures such as sheriff 's deputies to patrol newly de-annexed areas of the county and money for inmate medical services. When the budget process began, Mathilde Crosby, director of finance, projected that the county would have a budget shortfall of $32.6 million in fiscal year 2021 even before considering requests from various Shelby County departments. Since 2017, Shelby County expenditures have been greater than its revenues. Every year, the county has dipped into its fund balance to make up for the gap. That's not sustainable in the long term, Crosby and the county's other financial advisers have warned, and is likely to have an impact on the county's bond ratings. “I see us kicking the can down the road," said Commissioner Brandon Morrison. This year, the county was also faced with a decrease in expected revenue due to the COVID-19 pandemic. An error in setting the tax rate in 2018 has also been discussed as contributing to the deficit. Billingsley said that although the budget was passed, the subject is far from over. "I foresee this body revisiting the budget in three months, six months, nine months, and we'll just have to do our best to raise the revenue we need to and be respectful on our expenses," he said.
Effort to increase property tax fails Recreating a budget, cuts included
they wrangled over numbers with the administration, asking for more details or clarity and expressing frustration with the responses given. Elected officials expressed opposition to the cuts made by both Harris and the commissioners, some saying they'd have difficulty fulfilling their statutory responsibilities or may have to lay off employees. When commissioners cut more than $4 million from the administration's budget, Harris blasted that as unfair and warned that it would mean cuts to "vital programs" and possibly layoffs. On Monday, commissioners still had to whittle down the $16 million use of the fund balance in the budget. In the end, they redirected $5 million in funding from the state that had been slated for renovations at the new juvenile detention center, cut $1.3 million from the commission's community enhancement grants program and cut $1 million from the Shelby County Division of Corrections (only $500,000 of the corrections money went to the fund balance). The cut to the grants program was made with the understanding that Harris would direct federal funding related to COVID-19 to be distributed by commissioners to nonprofits with coronavirus-related needs. As for the cut to the Division of Corrections, it will result in the department having to move to 12-hour shifts for employees in corrections facilities, said Director Anthony Alexander. Commissioners also decided to use $971,000 (including the other $500,000 from corrections) to redistribute to elected officials who had their departments cut earlier in the budget process, excluding themselves and the election commission. The money will be reallocated based on the percentage of cuts experienced by each department. At the end of the lengthy meeting, Commissioner Eddie Jones, who chairs the budget committee, thanked the other commissioners for their work. “We could not have done it without each of you, and this is just another chapter in each of our service as commissioners," he said. Then Jones added, "I hope that the next chapter is a little less painful than this one was with all of the meetings.” An effort to solve the deficit by raising the property tax by eight cents met with failure late in the meeting, after the budget itself was approved. The amendment, which would have raised the property tax to $4.13 and focused much of the increased revenue on paying down debt, was proposed by Commissioner Reginald Milton. Commissioners Van Turner, Tami Sawyer and Mickell Lowery joined him to vote in favor of the amendment, while the other nine commissioners voted against. Milton also had the support of Javier Bailey, chief administrator of the Shelby County Assessor's Office, who said an eight cent tax hike would result in most homeowners seeing a $28 annual increase. Commissioners began recreating the 2021 budget using the 2020 budget as a baseline after rejecting the budget created by County Mayor Lee Harris' administration. Harris' proposed budget would have made cuts of $13.5 million and included a $16.50 increase to the wheel tax. After rejecting that budget, commissioners went back to the drawing board, making both additions and cuts in numerous meetings over two months. Often,