Questions surround county budget proposal

May. 30, 2014 @ 04:49 AM

There are questions surrounding Rutherford County’s proposed funding allocations to Rutherford County Schools for 2014-15.

On Tuesday, County Manager Carl Classen recommended funding the schools $1.2 million capital improvement request by utilizing fund balances from the county and the schools as well as the original budget allocation from the county as proposed by Classen in his budget message.

Under the proposal both fund balances will take a hit of over $500,000.

Fund balances are the accumulation of revenues minus expenditures. To put it simply, your fund balance is the amount of money left in your checking account after you have paid all your bills.

Fund balances help maintain cash flow for government entities and have become important, especially during tougher economic times, to help pay for services not covered by tax revenues. Essentially, if there is not enough money coming in, government entities can use certain fund balances to help pay for the shortfall.

Our question stems from the recommendation of using $564,734 of the schools’ fund balance to pay for capital improvements.

According to school officials, that particular fund balance came from county money already allocated to the schools for operational expenses — a completely different budget item from capital expenses.

There was an agreement between the county and the schools to hold part of the county’s operational allocation in fund balance because the county’s debt service was operating in the negative.

Classen is asking the county schools to use their own fund balance to pay for capital expenses.

What it means is that the schools had this money earmarked for operational costs but were asked to hold on to part of it. It’s no different than getting money for one thing and being asked to give it back for another purpose.

While it may seem convoluted, we simply ask why?

The schools are hurting for revenue, no one will debate that. So, why is this money, which was intended to use for other purposes, now being requested to go back to the county for something different?

We understand times are tough for everyone and the county and schools are certainly no exception.

But, if you look at the math, the county could pay this amount by raising property taxes approximately 2 cents per $100 of assessed valuation.

In the grand scheme of things, that doesn’t appear to be that much to ask for to keep the county’s fund balance more secure and allow the schools to use their fund balance for what it was intended.

We know the question of raising taxes is delicate but sometimes we have to bite the bullet in order to sustain what we have.

There is no guarantee of a better fiscal picture in the near future so the prospect of recouping the fund balance expense is not certain.

Perhaps the smart thing here is to suggest a tax increase to save the fund balance of the county, allow the schools to use its balance for operational expense and better get our fiscal house in order.

It may not be the most popular choice but it may be the most prudent.

By Matthew Clark, for the Editorial Board

 

The Daily Courier Editorial Board consists of community members Jerry Brewer, Kyle Bingham, Tom Padgett and Cliff Strassenburg as well as Editor Matthew Clark