Financial Breakdown

Analyzing the numbers in the city and county’s proposed budgets

Correction appended: While the city plans to apply for and use federal stimulus funds in capital improvements projects and basic infrastructure improvements in the future, these funds are not included in the structure of this year's budget.

Clarification: As pointed out in the breakdown of grants funding, the city, unlike the county, plans to increase or keep funding the same for all health-related nonprofits.

There will be, it’s been said, a lot of hemming and hawing about Knox County Mayor Mike Ragsdale’s proposed 2009-2010 budget when the County Commission gets its hands on it.

Meanwhile, Knoxville Mayor Bill Haslam’s budget has been widely praised for its boring, conservative sameness.

Even so, there are positive and negative points to both budgets. The flak Ragsdale is receiving when compared to Haslam can seem unfair when one considers the size and scope of the county’s budget as compared to the city’s. Haslam has no school system and no teacher’s union. He doesn’t have more than 1,000 sheriff’s department employees, nor does he have a very large (and publicly mandated) pension for those sheriff’s department employees. He does have a very expensive convention center.

But as the mayors prepare to go before their local legislatures, public reaction has made the distinction in their two public images more apparent than ever. One of these guys may soon have a much, much bigger budget situation to deal with in the near future. The other guy is Mike Ragsdale.

The Major Points

Ragsdale’s $648 million budget uses $20 million in reserve funds to cover its $7 million overall increase, including an $8 million shortfall in the sheriff’s pension fund as well as some funding increases. And let’s not forget the slap in the face to the arts.

Still, county funding increases seem to be going in the right directions. The Sheriff’s Office is getting $2.4 million more in funding (maybe less the costs of 28 “take-home” vehicles as strongly suggested by Commissioner Mark Harmon) and Knox County Schools are actually getting an increase of $5 million over last year’s $370 million.

Haslam’s budget, on the other hand, has a general fund decrease of $3 million (to $165 million) and an operating budget decrease of $14 million (to $352 million). And despite all that, no layoffs were recommended and the mayor’s proposed city employee salary increases go on as planned, 2.5 percent for all employees this year. And, to cap it all off, the mayor has proposed $27 million in infrastructure improvements, largely helped, of course, by the $10 million the city stands to get from the federal stimulus package.

Taxes

Where the mayors align is how they plan to collect taxes. These are Republican mayors in a fiscally conservative town. Each is in the middle of his last term, and legacy (or redemption, at any rate) is certainly on their minds.

Predictably, neither the city nor the county budget includes new property taxes. That is, of course, if you believe them.

According to the county property assessor’s office (the city uses county assessments), Knox County property values have risen an average of 16.6 percent over the past four years, which, given the state of the housing market, seems far-fetched. (Note: If your house appreciated at or below 16.6 percent, your taxes stay the same.)

However, it should be noted that the county does not count foreclosures and public seizures and auctions as “real sales,” putting a few people in the county in the odd position of living in a house valued at $82,000 (which is average here) next door to, or across the across the street from, a house that last sold for $20,000 and is technically valued at $0. Still, it somehow doesn’t affect their property values as far as their local governments are concerned.

City and County Grants

Perhaps the biggest point of contention so far has been the county’s grant program, this year slashed to $1 million, one-third its size two years ago. The county’s grants have been a sore spot for quite a while. A January audit of the grant program alleges that between 2004 and 2008, $757,000 was given out without commission approval. It also says that nearly $3.3 million in grants was awarded to programs connected to county employees and officials, including Knox County Community Development, which was responsible for giving them out. According to the audit, $501,500 of that $3.3 million went to organizations with which former KCCD director Cynthia Finch was involved. Finch gave up control of the grants in January 2008, shortly before she quit her job the following February. Since then a citizen review panel has been reviewing grant requests.

Still, with all the vitriol surrounding the county’s grant program, it seems worth mentioning that the city has been quietly cutting its community grants for the past few years as well. In the 2006-2007 fiscal year, the city gave out $1.9 million. The next year, $1.5 million, this year down to $1.13. And finally, for 2009-2010, Haslam is proposing a $996,000 grant budget, about half what it was three years ago.

The Arts

Knoxville Museum of Arts Director David Butler has now famously called Ragsdale’s arts funding a “Saturday night massacre.” Not everyone is sure what the precise meaning of that expression is, but we all get the gist. The county’s community grants for arts and culture were hit the hardest this year: from $430,000 to $150,000. Well, that makes them the second hardest-hit actually. Grants for senior and veterans services were actually cut more: from $510,000 in this year’s budget to $100,000 in the proposed budget for 2009-2010. But back to that arts massacre.

KMA

  • 2008-2009 County: $27,500
  • 2009-2010 County: $0
  • 2008-2009 City: $115,000
  • 2009-2010 City: $100,000
  • (Articles that have mentioned the city’s proposed cutback, including this one: 1)

Knoxville Opera Company

  • 2008-2009 County: $71,563
  • 2009-2010 County: $0
  • 2008-2009 City: $20,000
  • 2009-2010 City: $20,000

Arts and Culture Alliance

  • 2008-2009 County: $13,219
  • 2009-2010 County: $0 (The Arts and Culture Alliance didn’t request a grant)
  • 2008-2009 City: $25,000
  • 2009-2010 City: $25,000

Health, Mental and Otherwise

Local health clinics for the uninsured are facing city and county cuts just as their caseloads might see a big increase.

In January, the U.S. District Court in Nashville removed a 21-year-old injunction that barred Tennessee’s perennially cash-strapped Medicaid program, TennCare, from checking the eligibility of a group of recipients who once received a package of federal benefits called Supplemental Security Income but may no longer or may no longer live in Tennessee.

Called “Daniels class” recipients, after the 1988 case that led to the overturned injunction, it includes more than 150,000 TennCare enrollees. The Bureau of TennCare estimates that Daniels patients cost the program as much as $1.2 billion a year, $400 million of which comes from the state.

Last week, TennCare sent out 40,000 letters to Daniels class enrollees asking them to reapply for benefits, the first of four such mailings over the next few months asking them to re-prove their eligibility based on Medicaid requirements, which often require that an enrollee is too sick to work effectively, a crack in the system that is often large enough for, say, early-stage HIV patients to fall through.

The state believes that as many as 25,000 people receiving TennCare benefits either no longer qualify as disabled under Medicaid’s definition, have moved out of state, or have too high an income to qualify. There are about 63,000 TennCare patients in Knox County, 1,910 of whom were included in the first mailing alone.

Between an unknown number of local TennCare recipients likely to lose, or at least have a lapse in, their health care, and an unstable economy in which working people are increasingly losing their benefits or their pay, it’s lucky that there are a number of local clinics and non-profits dedicated to providing free and low cost care to the “working uninsured.” There are services like the mental health specialists at Helen Ross McNabb Center and general medical and dental care at the Interfaith Health Clinic. Many of them were counting more than ever on funding to come from city and county grant programs.

Interfaith, a low-income clinic with a $2 million budget that deals entirely with patients whose incomes are too high to qualify for TennCare but too low for private insurance, stands to lose about $50,000 in county grants this year, receiving $100,000.

As the News Sentinel reported recently, the Helen Ross McNabb Center stands to lose more than $175,000 in state funding, part of $37 million in mental health funding cuts, should the current budget pass. Meanwhile, Ragsdale’s budget requests $57,500, more than the $36,575 McNabb was awarded last year, but half of the $115,000 it requested. Haslam’s budget has only $5,500, same as in the 2008-09 budget.

  • County grants to health providers: $250,000
  • Decrease from 2008-09 budget: $30,000
  • City grants to health providers: $127,500
  • Increase from 2008-09 budget: $5,000

© 2009 MetroPulse. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Comments » 1

Bill_Lyons writes:

Obviously local government budgets are critical to our community dialog. Unfortunately, this article suffers from a number of major flaws. Here are a few.

"And, to cap it all off, the mayor has proposed $27 million in infrastructure improvements, largely helped, of course, by the $10 million the city stands to get from the federal stimulus package."

Response - No stimulus money is reflected in the City of Knoxville's capital budget

__________________________

"..it seems worth mentioning that the city has been quietly cutting its community grants for the past few years as well. In the 2006-2007 fiscal year, the city gave out $1.9 million. The next year, $1.5 million, this year down to $1.13. And finally, for 2009-2010, Haslam is proposing a $996,000 grant budget, about half what it was three years ago."

Response - Community grants funding has not been cut. What appears to be a reduction in the total reflects changes in categories for some projects. The Affordable Housing funding shown in 2007-8 ($323,000)that is not shown as a community grant in 2008-9 and 2009-10 was not reduced. Rather it was moved to the Community Development Department. The same year funding for the rescue squad ($41,500) was moved to the Fire Dept. Both were done because these were more contracts for services otherwise performed than community grants. Once this, and a few capital projects that have been completed, are removed, an apples to apples comparison of community grants funding has increased to its highest level in the last five years.. $765,700. This is up from $640,900 in the 2006-7 years.

___________________________________

"Local health clinics for the uninsured are facing city and county CUTS (emphasis added) just as their caseloads might see a big increase." ..... "Haslam’s budget has only $5,500, SAME (emphasis added) as in the 2008-09 budget.

Response - Somehow the same funding = cuts.

Thanks, Bill Lyons, Sr. Director of Policy and Communications, City of Knoxville

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