It ain't over till its over!


Could new Commission amend the budget after Sept. 1 and increase the tax rate? 


AG Opinion says yes; All it takes 6 votes on Commission

By Pat Hunter


A Public Hearing was held on June 7, 2010 regarding the adoption and setting the tax rate for the Loudon County FY 10-11 Budget. Commission adopted the budget and county tax rate. But did you know that a commission may approve a tax rate in June and come back, amend the budget and raise the tax rate provided the new rate is fixed before taxes become due on the first Monday in October? I heard Loudon County school board member Vice Chairman Gary Ubben sharing information with two other school board members after the adjournment of a Maintenance Committee meeting and I set out to find out to find the answer, could this be done? Its no secret that school boards across the state wish to have taxing authority.

Several citizens spoke at the Public Hearing about the budget and school building program but none of the citizen comments were covered by the local newspaper. As you read on, you'll understand why my comments (below) struck an untimely cord before the County General Election; could this happen here? 


Public Hearing FY 10-11 Loudon County Budget

My name is Pat Hunter. As Commission considers adopting the budget and setting the property tax rate for the Fiscal year 10-11, I would like to share my concerns. There has been talk by some commissioners about not raising property taxes this year but perhaps next year.

Loudon County residents face record foreclosures and bankruptcies. The clerk and master requested a part time employee just to process a large number of foreclosures and bankruptcies. He spoke about the record number of delinquent taxes turned in by the Trustee. Budget Committee Commissioner David Meers wanted to know the exact number of foreclosures but the clerk and master explained that it was difficult to give an exact number but the average was two or three a day when in the past it was one per week.

Commissioner Meers mentioned that the clerk and master had not been before the Budget Committee with budget requests so he felt his request should be granted. The clerk and master felt that if higher than normal delinquent taxes were a continuing trend that he would be back to request additional funding to automate delinquent taxes.  I just wanted you to see what our community is facing. 

When Commission considers setting this tax rate please consider these residents and others that are struggling in this economy. Senior citizens will not see an increase in social security for 2 years in a row. People have to tighten their belts and make sacrifices. I also heard the E-911 director speak about the high number of suicide calls; this should concern everyone.   

I would also like to share another concern that once this tax rate is set that Commission not come back after September 1st amend the budget and increase property taxes. After a school board Maintenance Committee meeting, I heard Loudon County Board of Education Vice Chairman Gary Ubben talking to two other school board members about this issue. I immediately emailed Mr. Woody, CTAS consultant and I posed three questions about county government procedures. If the current Commission approved the FY 10-11 budget and voted to set the property tax rate on June 7th, may the new Commission in September 2010, amend the budget, adopt the proposed $47 Million school building plan and increase the tax rate if they chose to do so?  If the answer is yes, I have some follow-up questions. 1. Would the new Commission's vote be by a simple majority or a 2/3 majority? 2. Is there a set time frame that the new Commission could take such action? 3. Do you know of any county commission that has ever done so?

I am not advocating this but I am curious if this county official was correct or just exaggerating.

When I received no written reply from County Technical Assistance Service (CTAS), none to date by the way, I sought an opinion, which I would like to share with you. 


Tennessee General Opinion No. 04-149, October 1, 2004. Amendment of the County Tax Rates QUESTION

"In view of Op. Tenn. Att’y Gen. No. 92-3 (Jan. 14, 1992), may a county board of commissioners, having approved a tax rate in June 2004 for fiscal year 2004-05, amend said tax rate by (1) deciding to levy a property tax increase for the purpose of funding transportation for public education; or (2) lowering the general fund tax rate and raising the education tax rate by an equal and corresponding amount; or (3) lowering the portion of the Business Tax (Tenn. Code Ann. §§ 67-4-701 to -730) that is allocated to the general fund and raising the allocation to the education fund by an equal and corresponding amount and supplementing the general fund by an appropriation from the fund balance account (rainy day fund), in order to provide additional money to fund transportation for the public school system, all prior to the mailing of tax bills to property owners?"



… In accordance with the foregoing authorities, a county board of commissioners, having previously approved a tax rate for fiscal year 2004-05, may amend the county’s tax rate, provided the new rate is fixed before taxes become due on the first Monday in October. Moreover, the various methods for raising tax rates described in your request appear to be appropriate alternatives for raising revenue to fund education. As described in your request, all of the proposed methods specifically levy taxes for school purposes, and none of the alternatives purport to improperly divert revenues collected for general county purposes to educational purposes.” 


Click to view pdf fileOctober 1, 2004 Tennessee Attorney General Opinion No. 04-149, Amendment of County Tax Rates


NOTE: While passage of a tax rate and budget is suggested for completion by June 30 or July 31 or even later...the critical
date is when the tax notices go out and taxes start being paid on October 1.

It appears that a county tax rate can be changed up to the time taxes start being paid (and for all practical purposes that would kick the deadline for changing the tax rate to the date that tax notices go out).

A budget can be amended, but any amendment must not affect maintenance of effort or other statutory requirements for schools, sheriff, highway department, etc. The budget law within which you are operating must be considered, too.