By Scott Robertson
The mood at December meetings of the Washington County Commission is generally light. Often, commissioners choose to get contentious issues dealt with in November or hold them until January in the name of peace and goodwill.
Festively dressed county commissioners including Larry England, Skip Oldham and Katie Baker heard tidings of neither comfort nor joy in an economic report at the Dec. 15 commission meeting. (Photo by Scott Robertson)
But not even the season of glad tidings kept County Mayor Dan Eldridge from sounding a pragmatic note at Monday night’s commission meeting at the George Jaynes Justice Center in Jonesborough.
“The county is $80 million short of having the capacity to fund the schools’ long range facilities plans as presented,” Eldridge told the commission.
A little over a year ago, the Washington County Board of Education adopted the plan, which includes the construction of two new schools, renovations and additions to existing schools and other facility improvements. “The consultant’s estimated cost for the entire plan is in the range of $90-$110 million,” Eldridge said.
Adding that $110 million to the share the county is forced to give Johnson City Schools for county expenditures brings the total issuance to around $214 million.
The county just doesn’t have that kind of money lying around, Eldridge said. “The county bonding capacity, calculated as 10 percent of the countywide tax base, is $290 million. Subtracting current debt of $155 million, we have $135 million in remaining bonding capacity.”
The simple math, Eldridge said, is that you can’t fund $214 million in expenditures when you have only $135 million. “And that shortfall does not take into consideration other funding priorities of the county,” Eldridge cautioned.
“The scope and priorities of the Long Range Facilities Plan should be reconsidered by the School Board after receiving guidance from the County Budget Committee regarding the amount of project funding expected to be available,” Eldridge concluded.
The mayor’s report to the commission also threw a wet blanket on any hope that an improving economy could lift county revenues to help offset education facilities costs anytime soon.
Eldridge told commissioners the “Economic Conditions and Outlook” section of the county’s annual financial report, which will be presented at the January commission meeting, but will be available online before that, will show, “while the overall financial condition of the county remains very strong, all is not rosy.
“I wanted to give you a sneak peak at some of the information included in that section so you won’t be surprised at what you see,” Eldridge told commissioners.
Eldridge pointed to multiple indicators that the county’s economic growth has slowed to a near standstill, with no potential saviors in sight.
“The unemployment rate stood at 7 percent at the end of fiscal year 2014,” Eldridge said. “However it should be noted that the unemployment rate also reflects a declining trend in the labor participation rate.” Out of work individuals who have stopped looking for work do not count in the unemployment rate, though they drain the local economy just as much as individuals who are counted as part of that 7 percent.
“According to the Bureau of Economic Analysis, Washington County ranked 91st of 95 counties in Tennessee in per capita income growth with a two-tents-of-a-percent increase in 2013. Building permits for the first three quarters of calendar year 2014 were down approximately 25 percent from the prior year. And, based on 2013 appraised values, Washington County’s total assessed value of the tax base declined by approximately 3.5 percent over the preceding five years.” The list went on and on.
County economic growth isn’t coming close to matching inflation, Eldridge said. “You need $232 million in new residential development to grow the property tax base 2 percent. We’re lucky to do $80 million.”
With a school system calling for new facilities, the cost of most infrastructure elements rising, and the county economy’s forward momentum slowing to a crawl, county government must carefully consider whether its future planned expenditures encourage economic growth, Eldridge said. Those that don’t should be examined with a highly critical eye, but those that do, he added, will be key to getting the county economy moving forward at a healthy pace once more.
“Strategic opportunities to invest in school facilities, retail development, public infrastructure and other economic development initiatives that stimulate private investment resulting in long term growth in sales and property tax bases, creation or retention of jobs and improvements in the quality of our workforce must be strongly considered,” Eldridge told the commission. “’Strategic’ will be the key word in every consideration simply because we do not have unlimited resources to invest.”
