Jellico: Tax hikes likely to balance budget blunders

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By Beth Braden

 JELLICO—The town's Board of Mayor and Aldermen is one step closer to correcting a budget deficit and tax blunder that puts them at risk for a state takeover.  

On Tuesday, the board sought the guidance of local bankers — and former board members — Allen McClary and John Davenport in finalizing the already overdue budget. McClary is the president of Union Bank, which holds the town’s general fund account.

“Some of the numbers that you were working off of just didn’t look right to begin with, so we started working,” McClary said. 

McClary’s figures showed the town at a $220,000 deficit, though he encouraged the board to also double check his work to ensure the numbers are accurate.

McClary’s deficit figure includes the $161,000 payment to the IRS in unpaid payroll taxes and penalties. 

“This is nothing written in stone, this is just mine and John’s efforts to help you,” he said.

He encouraged the board to move forward and fix the deficit, not dwell on the past.

“Going back and trying to figure out how we got here today is not gonna help,” he told them.

The board again contemplated tax hikes and “city stickers” for vehicles in the town to help cover the deficit, but the sticker idea was ultimately abandoned when they realized the start up costs would negate any profits.

By raising property taxes from $1.15 to $2.15 for one year, the town will be able to pay the IRS and taxes can be reduced the following year. 

Reducing taxes is the plan, according to several board members. Darrell Byrge was absent, and Alvin Evans was hesitant to say whether or not he agreed with the tax hike.

“The first thing is, let’s say that we raise these property tax and…50 percent decide they’re not gonna pay them till February,” Evans began.

“…It’ll bankrupt the city,” McClary finished.

Property owners are more likely to pay on time with fewer delinquencies if they see a board working together, McClary said.

McClary’s message is nearly identical to what certified municipal finance officer Sondra Denton has told the board since she began working with the city last December. Mayor Les Stiers said while Denton is qualified and knowledgeable, the board was more likely to trust McClary because he’s a well-known citizen.

“He’s local,” the mayor explained. 

The board is set to reconvene Monday night at 8 p.m. to vote on an amended budget ordinance with the tax rate set at $2.15.