Cooper: The county's return on investment

Cooper: The county's return on investment

September 8th, 2017 by Clint Cooper in Opinion Free Press

The new Middle Valley Elementary School, which opened in 2016, is one type of capital project that could come out of a de facto tax increase the Hamilton County Commission voted to authorize on Wednesday.

Photo by Dan Henry /Times Free Press.

When it comes to paying more taxes, few people are happy about it. But nobody wants to buy a pig in a poke.

The de facto property tax increase Hamilton County commissioners voted 8-1 to adopt Wednesday is not that. Indeed, with funding for capital projects in schools that educate some 43,000 students, an expansion of the nobody-wants-to-fund-it-but-we-have-to corrections system and an investment in a sewage treatment plant that will provide capacity for 10,000 more homes, the increase pays for needs that are literally before our very eyes.

"It's not about districts," a retired, fixed-income grandmother from Hixson said before the county commission meeting in support of the then-proposed hike. "It's about Chattanooga [and Hamilton County]."

It's an opportunity, a retired businessman said, "to think about the next election, or the next generation."

With 2018 an election year, commissioners could hardly be blamed if they chose to hold the line (which in this case was voting against holding the line on the county's millage rate after lowering it per state law after a county reappraisal).

But they had ammunition to counter opposition to an increase:

' It's been 10 years since the last tax increase and 12 years since the last increase solely passed for schools. What cost $1 in 2007 costs $1.18 in 2017. Paying 18 cents more is nothing, but schools, jails and sewage treatment plants cost many thousands of dollars times 18 cents.

' Hamilton County Mayor Jim Coppinger has run a fiscally tight ship since taking office. County government has grown an average of only 2 1/2 percent over the past 10 years, and after a sales tax agreement with the city of Chattanooga expired in 2011 the county had to cut $13 million out of its existing budget, slice more than 50 positions and let some 30 employees go.

' The county has a AAA bond rating, making it more attractive to lenders and allowing borrowing for items such as new school buildings to be less expensive. (Nashville and Memphis, for instance, don't have a AAA rating.) In other words, a revenue increase of $25.5 million can be leveraged into more than $200 million for capital projects.

' Without a revenue increase, the county would likely have to dip into its fund balance to pay for significant capital projects. A precipitous drop in the county's fund balance risks the county's coveted bond rating.

' All county residents won't see an increase in their property taxes in 2018. Residents whose homes were appraised in 2017 at the same amount or lower than in 2013 will pay the same or less.

' Along with the de facto tax increase, county commissioners voted 9-0 to adopt the state's tax relief program, which reimburses some tax money to qualified applicants who are elderly, disabled veterans or their widows whose annual income doesn't exceed $29,180.

' A new schools superintendent has brought a renewed hope for improvement and energy within the county's 79 schools, especially its struggling ones.

' The county's proposed jails plan, which involves adding capacity to the Silverdale Correctional Facility, will save the county millions of dollars compared to building an entire new jail, a recent report has revealed.

' The proposed sewage treatment plant will be able to serve the 10,000 more new homes the county says will be needed by 2021. New homes mean more families paying property taxes, giving the county additional money that might delay the next tax increase.

On Wednesday, Republicans and Democrats alike on the commission praised Coppinger for attempting to answer any and all of their questions about the revenue increase, for his fiscal management of the county and for his not moving on an increase until circumstances (reports on the jail and the sewage treatment plant) prompted it after the initial fiscal 2018 budget was passed in June.

"I, for one," said Commissioner Jim Fields, referring to holding the line on expenses, "can say Mayor Coppinger and his staff have done a tremendous job over the past seven years."

The county residents who will pay more property taxes, in time, will be able to judge for themselves whether the extra money they'll pay is having an effect.

Their children will tell them if the leaking roof on their school is repaired, they'll hear reports of a new school building in the works, they'll see the Silverdale facility being physically expanded and they'll note the new neighborhoods going up in the eastern end of the county.

Assuming they happen, those, they'll be able to say, are the types of return-on-investment we like.

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