Capital outlay note borrowing to be deployed for additional cash flow
By Jeff Keeling
The Johnson City Commission passed a fiscal 2015 budget with no tax increase on a 3-2 vote in a Friday night meeting that became heated at several points.
City Commissioner David Tomita.
The commission broke clearly into two camps on the issue of whether the city and the schools should benefit from a property tax this year, or whether both entities could get through a year, search for efficiencies, and fix next year what all commissioners admitted were systemic budget issues.
Commissioners David Tomita and Jeff Banyas and Vice Mayor Clayton Stout opposed a property tax increase, at least for this year. Mayor Ralph Van Brocklin and Commissioner Jenny Brock both made cases for increasing revenues now, and both offered amendments — all defeated 3-2 — with property tax increases ranging from 10 cents to 22 cents per $100 of assessed value.
The final budget adds $1.7 million to the Johnson City Schools budget. In the June 19 first reading, an amendment added $500,000 to the school imbalance, and Friday saw an amendment by Commissioner David Tomita that restores an additional $1.2 million. The Tomita amendment, passed 3-2, also restores several non-school requests, and does so by converting a planned $1.34 million road resurfacing budget into a 7-year capital outlay note, freeing up just over $1.1 million in cash for the fiscal year that begins Tuesday. It does not restore any funding for special appropriations for non-profit agencies, a subject of much discussion during a public hearing at the June 19 first reading.
The amendment put $600,000 of that $1.1 million into the schools, and it made available up to an additional $600,000 from the city (with no immediate source) if the school system’s revenues did not exceed its projections by at least that amount. The remaining half million dollars was split between a 1 percent city employee raise, an EMS technology item and about $271,000 in unitemized funds.
The Board of Education had initially requested $3.4 million in additional funds beyond the initially prepared city budget. This week, after the initial restoration of $500,000, the school board made $1.6 million in cuts, and implored the commission to make up the remaining $1.1 million shortfall.
City Commission chambers were packed with more than 150 people, many of whom appeared to be in support of a tax increase and particularly representing the school system. Much of the discussion centered around the school budget, its needs, and the school system’s contention — supported by Van Brocklin and Brock — that this year was a long time in coming and that its large requested increase was not a sign of profligacy.
Cheers broke out at several points early in the meeting following comments by Van Brocklin and Brock, including once after Van Brocklin had asked people in the audience to refrain from expressions of either support or opposition. As Tomita outlined his amendment, there was frequent, audible opposition expressed despite Van Brocklin’s admonition.
Commissioner Jenny Brock during a budget hearing June 11.
“We can fix it all tonight if we can get three votes, but we’re quite divided as a commission,” Brock said at one point during the meeting. She also characterized Tomita’s amendment as “kicking the problem down the road” and expressed strong opposition to funding ongoing school needs, and employee raises, through borrowing.
“I think we’re setting a very bad precedent here in the way we’re managing the finances here,” Brock said. “It’s like wheeling and dealing. Let’s just stand up and fix this thing now.”
For his part, Tomita said he was not opposed to a property tax increase, but that he believes allowing some school requests to go unfunded this year and undertaking a top-to-bottom budget review to seek efficiencies could yield a truer picture of the actual needs by next budget cycle.
“We don’t start this (budget review) in May,” Tomita said. “We start this now. We’ve already started a good deal of it. There’s a lot more work to do, and I’m willing to do it. I know some of you are a little angry with me. I want to work with you — I really do.
“I care about these students, I care about this city, just as much as you do. We just disagree about how to go about things.”
For their part, both Brock and Van Brocklin contended that the schools needed the money they were asking for. Van Brocklin, whose initial amendment June 19 called for a 22 cent tax increase, sounded visibly frustrated at times. Brock introduced a motion prior to Tomita’s calling for a 21-cent increase, after she had run through a litany of facts showing Johnson City Schools’ high achievement (third in the state by one measure) and its relatively low per-pupil funding.
Brock also pointed to pupil-teacher ratios and administrator-to-pupil ratios that suggested a leaner operation than the state averages and than nearby city schools. She pointed to a slide showing systems such as Kingsport and Bristol with higher per-pupil spending but lower achievement scores.
“So in spite of our funding, this school system does some miraculous things,” Brock said.
Earlier, she had mentioned the lack of any tax increase since 2002, and the fact that cost of living had risen roughly 30 percent during that time.
“The day has come when those revenues to really bring us the quality of life that we want is not sufficient,” Brock said. “Do we want our city to stay stagnant and stay still, and try to expense cut our way out of this, or are we going to stay investing in our city for growth, to bring more people in, because growth is the ultimate answer. But somewhere along the way we need to make some adjustments so we don’t take a step backwards.”
City Commissioner Jeff Banyas.
On the other hand Banyas, the longest-serving commissioner, cited several concerns with what he saw as a failure by the school system to really consider some potential savings over the years. They included, he said, an offer by the city to take over the school’s maintenance. He also said he had asked the school board to go before the Washington County Commission with a request for funds, and to compile a three-to-five-year spending plan, and said the board had done neither.
“I do think we need to allocate additional dollars to the school system,” Banyas said. He added, though, that while many in the room Friday may want their property taxes increased, that didn’t hold true for all Johnson Citians.
“I do think that is what’s wrong with this country,” Banyas said. “Nobody wants to make a hard decision. Nobody wants to stand up and say, ‘government, you have to live within your means.’ And we cannot continue to fund business as usual at any level of government. The easy thing to do would be to raise taxes. Most of the people in this room would probably not even notice a tax increase, but I can assure you there are many, many, many more who live on fixed incomes, and they would notice.
“I think it’s our job and our duty as public servants to insure that we do all that we can do to increase productivity and to decrease cost before we consider a tax increase.”
