Loudon County Commissioner Austin Shaver will present
his plan to fund the county school building program without an
increase in property taxes to the Loudon County School Board at the
workshop scheduled for Thursday night at Greenback School.
Shaver presented the plan to the Loudon County
Commission in direct opposition with a proposal by Commissioner Don
Miller whose plan would raise the property tax rate by approximately
Shaver said he has gotten a lot of positive feedback
since his plan was unveiled. "The constituents I've heard from have
been very positive in receiving it. They're excited that multiple
ideas are being considered and that's ultimately what we are there
to do — to look at all the options and figure out what is best for
the citizens," Shaver said.
According to a handout prepared by Shaver, the goals
of his plan are to build without raising taxes and to build without
negatively impacting the reserves in the County General Fund.
Shaver's plan proposes to pay for the building program from Fund 156
— the Rural Debt Service Fund and to take five pennies from the
County General Fund and shift them to Fund 156 and to take another
five pennies from Fund 141 — the School General Fund and shift them
to Fund 156 as well.
Shaver said he feels the last two property tax
increases should be enough to get Phase I of the county school
building plan underway.
"I think my plan is very feasible at this time. It is
entirely unreasonable for us to ask the citizens to bear the burden
of any further tax increases when the last two, including the 32
cent one in 04-05, was passed implicitly for education but they're
not seeing anything as a result of those increases," he said. "It's
time to put that to good work. That has given us the leeway and the
finances to do this without another property tax increase," he said.
Lisa Russell, who represents Greenback on the county
school board, said she thinks Shaver's plan is on the right track.
She said she thinks shifting reserve funds makes more sense than
raising taxes during these tough economic times.
"All you have to do is look at the audits, they support his
contentions. The County General Fund increases by 2.5 million every
year. They can tax the people for a building plan or take 1.3
million out of their 2.5 million (reserve increase) and fund the
building plan. Then their net increase is 1.2 million. Their fund
will still grow," she said. "Rather than tax the people I would
think that would be the answer. What do you think the tax payers
would prefer?" she asked.
Shaver has also expressed concern regarding the $47 million price
tag estimated for Phase I of the building plan. He said that price
has been questioned by members of the school board, the county
commission and by architects. He said he feels the building plan
should be tailored to what the county can afford to fund.
"That is the overall idea of my plan, rather than taking the first
number offered, rather than taking that on blind faith, going back
and saying we can afford this much without a tax increase and asking
the school board what can you do with this," Shaver explained.
With the estimated $47 million price tag, Russell
said she agrees that number is far from certain. "I do realize
Austin's plan will not fund a $47 million building program, but it
will fund, I think, between $32 and $35 million and that's a good
chunk of money," she said. "Keep in mind that $47 million is just an
estimate." Russell said it was entirely possible once the program is
put out for bids, it could come in lower. Russell said she wants to
find the most economical solution to give county students the best
facilities the county can afford. "I do not want to have to choose
between Greenback and Loudon, the kids in both those areas need
schools and deserve to have what they need," Russell said.
Shaver's handout details how the plan would work. According to his
calculations, one penny is equal to $114,000 at a collection rate of
98 percent. Fund 156 currently receives 15 pennies annually or
By Shaver's calculations "moving five pennies from Fund 101 and Fund
141 will create 22.85 million per year in Fund 156 based only on
property tax revenues and the shifting of pennies without accounting
for other revenue streams contributing to Fund 156."
The handout concludes that "payments on the $12.5 million loan will
leave $1.85 million per year (property tax only) to pay for the
school which will require interest-only payments for the first two
to three years."
Shaver's handout says the financial options to raise
funds without a tax increase include $29 million for 30 years at
five percent equaling $1,868,139.24 per year; $33 million for 30
years at four percent equaling $1,890,564.60; or $37 million for 30
years at three percent equaling $1,871,921.88 per year. Shaver
acknowledges no plan is good if it doesn't have the necessary
"Hopefully, between the two entities (the school
board and the county commission) we can work out a plan that meets
everybody's needs without raising property taxes. The reality is
that it doesn't matter unless we have six votes to support it on the
commission," he said.
Board member Gary Ubben thinks the board must consider the schools'
operating budget first and said he fears Shaver's plan could
decrease the amount of funds going towards school operations. "I
think the primary issue right now for us is this coming year's
operating budget. What Austin is proposing, I believe, will require
a cut in the current pennies that are provided for the operating
budget. I've looked at the preliminary information we have so far, I
don't see how the district can operate next year with any less
operating money than we have this year," Ubben said. He noted the
system must deal with fixed costs and increases in the amount spent
on energy and transportation. He also said many programs are
required items by the state. "We also have a salary schedule for
teachers that has automatic pay increases we must honor. To try to
cut the budget does not seem reasonable to me at this point," he
added. Ubben also expressed concern that Loudon County funds schools
at only 85 percent of the state average and cutting operating
expenses now "doesn't seem reasonable to me." He said he wants to
get operating costs covered before considering how to fund the
building program. "At this point in time, we've got to make some
decisions relative to that operating budget first and then see where
we are, dollar-wise. Then at that point we can consider how we might
fund the building program. If there is money available from other
sources, wonderful. But, on the other hand, I suspect it is going to
require some additional taxes in order to underwrite it," Ubben
Shaver said he feels his plan will work because it allows the county
to get the school improvements without raising property taxes again
and without using reserve funds. He said the only impact would be
the general fund would grow at a slower pace. "This doesn't require
us to dip into reserves. It may mean we don't grow as much, but we
can get new schools without raising property taxes. I think it's the
best of both worlds," he said.