By JAMES BROWN
Glasgow Daily Times
Last week, Daily Times reporter Gina Kinslow wrote a story on Metcalfe County magistrates setting the property tax rate for their county. On the second page of a prepared document Kinslow received from the fiscal court meeting, it stated the property tax rate would raise about $252,000 in revenue.
I just couldn’t believe that was correct. So I questioned the reporter, she checked with the county treasurer and confirmed that number was right. Then the clerk told Kinslow that the county would actually only see about $200,000 because not everyone pays their taxes.
The rest of what follows in this column is not me picking on Metcalfe County. It just happens they were discussing tax rates and I was able to get my hands on some historic data to review how their budget works. There is a bigger picture discussion that involves every locally elected official, their budgets and how are we going to reconcile political rhetoric about federal spending versus providing services locally.
The budget for Metcalfe County isn’t wholly dependant upon property taxes, even though that seems to be the thing most discussed in area school board, fiscal court and city council and commission meetings. Everyone talks about property taxes, apparently believing it is the primary revenue stream for local public agency budgets.
Metcalfe County’s general fund budget in recent years has been in the $2.5 million range. The collected property taxes have been in the $200,000 range. The occupational tax has collected more than $600,000 in lean years. Throw in taxes on motor vehicles and tangible personal property, and taxes account for about $900,000 annually of the Metcalfe County budget.
So where does the other $1.6 million in the budget come from? Many small fees and other small usage taxes. Except in the fiscal year 2010-11 budget, the fiscal court carried forward $1.1 million in prior-year surplus. That was in the height of the lean years and as we have witnessed, carried over budget surplus is how many local governments have maintained their general funds.
Of course, along with the general, there are several other areas where local governments allocate and spend money. Metcalfe has several other funds – road, jail, local government economic assistance, state grants, federal grants ... wait, what?
That’s right, the FY10-11 budget has more than $1.9 million in the federal grants fund. The FY13-14 budget has $2.1 million, which is only $300,000 less than in the general fund for this fiscal year.
Based on the FY10-11 budget, the federal money was used in several areas. Nearly $600,000 was allocated for disaster and emergency services. I didn’t dig too deeply into the numbers. I did look at the federal grants fund for FY12-13 and found it had $1.8 million and $2.1 million in FY13-14 — $1.1 million of the FY12-13 federal is listed as capital projects, while $1.25 in FY 13-14 is listed as protection to persons and property.
Basically, the purpose of the largest allocation in the federal grants fund varies each fiscal year. While in the Metcalfe County budget it clearly marks a fund for federal money, federal dollars come to local governments in a variety of ways to be spent in a variety of ways. Everyone knows much money comes to local school districts from the U.S. Department of Education. They may also be aware that federal money often lands in local road funds. After Sept. 11, 2001, and the creation of Homeland Security, public safety agencies have received tons of money in the form of Homeland Security grants.
Ironically, with the proliferation of federal money being handed out to local governments, there also seems to have been a growth in local elected officials pandering to constituent members who seem to dislike the federal government, especially how it spends their tax dollars. What is often lost in the political rhetoric is an actual discussion about federal money, how it is spent and what will be the cost to local governments as federal spending is reduced.
Political rhetoric focuses on so-called big ticket items such as defense spending, Social Security, Medicare, etc. But there are billions of dollars sent to local governments nationwide through federal grants and by other means that help fill holes in local services. That money buys new police cars, it builds new firehouses, it fixes bridges and the list goes on.
Without that money, many rural areas of this nation would not be able pay for these items. Federal money comes with strings and with those strings, the federal government demands local governments adhere to federal rules and laws. As our mothers told us, there is nothing free in life, especially not the use of public tax dollars.
This is akin to living with Mom and Dad after high school or college. If you don’t like their curfew, move out, get a job, get your own place and live independently. Otherwise, you are subject to their rules.
In D.C., our elected officials are not going to tackle real changes in big-ticket programs in order to fix our federal deficit issues. They will nickle-and-dime reduce federal spending, which will cut money to local elected officials used to fill local budget holes.
Some local officials have said, “I’ve never voted for a tax increase and never will,” while providing services to their constituents with federal money. If the money dries up, what then?
The rubber will meet the road for us all when we must decide between the services we are accustomed to receiving versus the tax rates we want to have. Will we accept fewer fire fighters, fewer police officers, fewer freshly paved streets? What if a bridge is destroyed in a flood, how long will we wait patiently to have it repaired?
What we must have is less political rhetoric about federal spending and taxes, and more discussion about how money is collected and what services we must have.
James Brown is editor for the Glasgow Daily Times. He can be contacted by e-mail at email@example.com