editorial (2007-49)

Using Surplus Tax Collections


Knoxvilleâ’s mayor has good ideas when it comes to spending windfall dollars

After reviewing Mayor Bill Haslamâ’s proposals for using about $8 million in extra tax collections this coming fiscal year, we conclude that the budget addendum he sent to City Council was well thought out and the funds well distributed.

The city will have a total of about $171 million to spend, rather than the $163 million that was budgeted, according to Senior Finance Director Larry Martin, and the first $3 million, taken off the top, will go to the cityâ’s pension system. The result will be a reduction in the cityâ’s annual pension contribution of about $300,000 for the first 10 years and about $250,000 per year after that.

Itâ’s the kind of good business sense for which we give credit to Mayor Haslam and to Martin, the retired Knoxville banker who joined the administration a little over a year ago for just such purposes as estimating tax revenues conservatively and figuring the most effective ways of allocating surpluses.

Itâ’s also a testament to Tennesseansâ’ sound investment sense that the Hall Income Tax collections on their taxable investments produced the revenue over and above forecasts, as it came in a year when the national economy was beset by ups, downs, and uncertainties in most investment fields.

Another of the Haslam administrationâ’s proposals for the surplus is the acquisition of $781,500 worth of LED bulbs to replace incandescent bulbs in the cityâ’s traffic lights. The much more efficient LEDs should save both energy and expense in the future.

Committing $1 million to a new ladder truck for the fire department and adding $500,000 to the cityâ’s fleet replacement fund should work to take an older ladder truck that spends more time out of service than in service completely out of the repair picture and should avoid surprise costs across the fleet of vehicles in the near future.

An infusion of $550,000 to the mayorâ’s pet fund for installing sidewalks and repairing existing sidewalks is another good investment by the city that could well have been included in the original budget, except that some other essential city services might have been cut to make way for the sidewalk improvements. An extra $200,000 will be committed to street paving, and $250,000 to pay for curb improvements to allow for disability access.

Itâ’s pretty hard to argue with the allocation of an additional $300,000 to flood controls along First Creek to alleviate stormwater problems that have beset city residents and businesses for decades and are still not fully resolved.

There have been calls for tax relief, rather than expenditures once the surplus $8 million was found, but Knoxville citizens ought to keep in mind that the needs met by the budget addendum will help forestall any future tax increase, and that there was no increase recommended this year in spite of rising costs across the board for government services.

A subset of citizens suggested saving the money, and that is always an appealing idea, but the cityâ’s rainy day fund balance of almost $40 million is adequate to cover most foreseeable emergencies as it is. Give the mayor and his staff a hand for finding the most pressing needs for the tax excess and putting the money to work where it will do a lot of good and save tax dollars down the road.

About the Sunshine

Gov. Phil Bredesen has come out in defense of Tennesseeâ’s Open Records and Open Meetings Acts as they stand, questioning the need for their reform and saying he would hate to see the open government laws watered down.

The governor was responding to a legislative study committeeâ’s recommendations to the General Assembly last week that would allow private meetings of up to three local politicians to discuss public business. Under present law, no two such officials may deliberate a governmental issue without giving public notice of their meeting.

Without coming right out and saying he would veto any legislative attempt to weaken the 1994 acts, Bredesen said he was shocked to find those laws so restrictive when he entered the public realm after years in private business. He said he didnâ’t at first see how public business could be conducted entirely in the open. He learned how to live with the requirement, however. It may not be as efficient to require full openness in local government, he concluded, but in the end â“government just works better if you come down on that side of it,â” Bredesen said.

Letâ’s hear it for the governor.


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