Bledsoe County, Tennessee, mayor vetoes budget that contains a more-than-$500,000 revenue shortfall

The mayor of Bledsoe County, Tennessee, has vetoed a budget approved last week by the county commission that contained a more-than-$500,000 revenue shortfall, threatening the county's fund balance.

"On July 15, this commission approved the county general budget consisting of expenditures that exceeded over a half-million dollars in excess of estimated revenues for the 2019/2020 Bledsoe County general fund budget," County Mayor Gregg Ridley wrote in a letter to commissioners dated July 18. "This is neither financially responsible, nor is this action sustainable for future generations of Bledsoe County."

Ridley said the letter served as his official veto. Under state law, a Tennessee county mayor can veto only the entire budget, not portions of it.

In a phone interview Wednesday, Ridley said, "The purpose of a veto is not to kill a measure, it's to bring it back to talk to the commission, get public input and that gives us 30 days to sit down and discuss this because all it takes is for the same votes that passed it to pass it again."

Longtime Bledsoe County Commission Chairman Craig Mercer agreed with Ridley's veto and said Tuesday that elected officials need to work together on a solution.

Mercer said the finance committee, of which he is a member, had proposed an 18-cent property tax hike in a budget proposed last week that contained some deep departmental cuts. But the measure failed in a 7-4-1 vote against the hike. Then the commission passed the budget as-is in a 9-2-1 vote, with the $500,000-plus shortfall included. One commissioner was absent in both votes.

"We're going to have to do something," said Mercer, who wants to avoid dipping into the county's fund balance. "We goofed up passing that budget."

Tennessee law requires county legislative bodies to adopt a balanced budget by Aug. 31. A county fiscal year runs from July 1 to June 30. If a county fails to adopt a budget by July 1, the operating budget from the prior year will continue in effect without any government action until a budget is passed. If no budget is adopted by Aug. 31, the commission can "under extraordinary circumstances" seek approval from the Office of State and Local Finance to extend the continuation budget until Sept. 30, according to University of Tennessee County Technical Assistance Service guidelines. The inability of a commission to agree on a balanced budget would not meet requirements for the state to grant an extension, according to the assistance service.

Both Mercer and Ridley said they believed some commissioners didn't realize they were passing a budget that had more expenditures than revenue because there was little discussion in what Ridley said was "literally 30 seconds" between the down vote on the property tax hike and passage of the shortfall budget.

Mercer said the last property tax increase was in the 2013-14 fiscal year. The rate now stands at $2.2060 per $100 of assessed value. The 18-cent hike shot down last week would have put the rate at $2.3860.

But now officials will weigh ideas to prevent a property tax hike that include asking all county department heads to cut their budgets by 8%. Mercer said commissioners, who got a mandatory raise this year, would probably have to take an 8% cut, too.

Ridley and Mercer said expenditures have increased because costs since 2013 have soared, particularly in employee health insurance expenses and, more recently, county jail operations have risen, as well.

The annual bill for the county's portion of employee health insurance in 2013 was about $35,000, Ridley said. Since 2014, the county's portion has been about $240,000 a year or, cumulatively, nearly $1 million over the last five years.

Add to that the cost of housing more local inmates than ever at the county jail. Last year, the jail collected almost $1 million for housing state inmates through state fees, he said, but as local inmates took up more beds, that figure dropped to $705,000 this year. Another factor, Ridley said, is a change state lawmakers made two years ago in the way rural telephone coops were taxed that dealt out a $68,000-per-year blow to county coffers.

"You can see if you keep adding these numbers up, that's kind of where we are. So we've got to make cuts to be able to balance this budget with no new revenue," Ridley said. Without a balanced budget, "come Aug. 31, I'm not authorized to write a check."

If the budget remains as is, it will take a 28-cent property tax hike to balance it, he said.

The called meeting on July 29 could be a back-to-the-drawing-board situation, Mercer and Ridley agreed.

Contact Ben Benton at bbenton@timesfreepress.com or 423-757-6569. Follow him on Twitter @BenBenton or at www.facebook.com/benbenton1.