By Jeremy D. Wells
Carter County Times
With the debt on the county jail nearly satisfied, the county has a decision to make. They could allow a sunset clause on the insurance premium tax to kick in, effectively cutting the tax in half and lowering it from 9% to 4.5%, or they could keep it and put those funds to use elsewhere.
Between county debt that judge executive Brandon Burton says he would like to pay down, and roads that the magistrates and their constituents would like to have repaired and upgraded, there are plenty of areas where the funds could be put to use.
“I think, if we leave this on in the first year we could make (significant) blacktop improvements,” Burton said during a special session on Monday afternoon.
“It’s an opportunity to not just be functional, but prosperous,” he added.
But not everyone agreed.
District three magistrate Millard Cordle voiced his objection to extending the tax rate, stating that “the people and the insurance companies” have told him they want the tax rolled back, and that the county can do more work on roads by making cuts elsewhere.
“Everyone was promised… 4.5% and I think that’s why they voted for all of us,” Cordle said.
Magistrate Chris Huddle, however, worried the county wouldn’t be able to pay their current bills if they allowed the tax rate to roll back.
“If it goes back to 4.5% we’ll lose a million dollars a year,” Huddle said.
If the insurance tax rate is left where it is, however, he said the court, “could legitimately look at lowering the property tax rate (in the future).”
“If we could lower the property tax, that would help people more,” Huddle added.
Cordle, however, said the insurance tax rate was hurting families now, especially when they added driving age children onto their policies.
But Burton and Huddle argued that the insurance tax rate was a more fair tax rate than other taxes, including property taxes, because it’s graduated based on the value of an automobile.
“Not everyone is paying the same,” Huddle said.
If, for instance, a family is insuring a lower value car, Burton explained, the amount of their tax bill will be lower to reflect that lower insurance value. If they are insuring a more expensive, higher value automobile, at a higher rate, then they will be taxed at a higher rate. In this way, he said, the impact on lower income families and individuals is mitigated. Even then, he said, the amount isn’t out of reach for owners of higher value vehicles.
“If they have a $300,000 policy, it costs them about $270 more per year (with the current tax rate),” Burton said.
District five magistrate Harley Rayburn said he felt his constituents would support keeping the tax rate where it currently was if they saw improvements to their roads and communities as a result.
“If people see where this is going, they’ll be behind it,” Rayburn said.
Burton said if the court decided to keep the tax where it was, he believed they’d be able to put anywhere from $800,000 to $1,000,000 into the roads in the first year. Besides improvements to the roads, he said, he’d like to focus on paying down other county debt.
Between matching payments required to secure FEMA reimbursements, HVAC replacement at the courthouse, and other county expenses and maintenance needs, the county currently has around $5,000,000 in debt, according to county treasurer Beth Justice.
But Cordle said he’d rather the county look at areas where they can make spending cuts first.
“It seems to me like we don’t make any cuts, we just keep taxing,” Cordle said.
But Burton said the county was already operating on a limited budget and unable to keep up with necessary maintenance, much less make improvements.
“I don’t know where we can cut,” Burton said, noting the county has already cut services to a minimum.
Meanwhile, he said, the county’s infrastructure continues to age.
“We’ve got ditches and low water bridges that haven’t been touched since the 50s,” Burton said. “They’re crumbling back to gravel.”
“We’ve been band-aiding,” he continued, “and we need to move forward.”
All of the magistrates agreed that their constituents want better roads, with Rayburn reiterating that when people see the improvements being made with the money, they’ll support maintaining the tax rate.
The conversation about the state of the roads prompted Huddle to quip that he didn’t understand why the insurance companies would be opposed to the tax, as any improvements to the roads meant less damage to insured vehicles – and less chance of an insurance payout resulting from that damage.
Rayburn proposed approving the extension temporarily, and then revisiting the issue again in two years. By then, he said, people should be able to see what the tax money was getting them.
“I suggest we do it for two years,” he said. “Then we’ll be able to see if it’s working, and the people will see if it’s working.”
Rayburn made the motion, seconded by Huddle, to enter into the first reading of an ordinance that will maintain the tax rate rather than allowing it to sunset.
Cordle voted no, with Huddle, Rayburn, and district four magistrate Danny Holbrook voting in favor of the measure. Judge executive Burton – who is allowed to vote but only required to do so when necessary to break a tie – also chose to vote in favor of the motion.
Magistrate Derrick McKinney was not present for the meeting.
Unless a majority of magistrates change their mind before the second reading, the county will pass the two-year extension of the tax rate at their next regular meeting.
In other action the court moved to approve claims and transfers, and to approve a budget amendment, before adjourning.
Contact the writer at editor@cartercountytimes.com