Officials still unclear how state’s finances will impact McMinnville

By AMY SATTERWHITE / Staff Reporter for the Southern Standard

DAVENPORT

The state’s budget crisis was felt at the local level earlier this week as McMinnville officials decided to delay action on their 2002-2003 budget, with some officials reporting McMinnville’s governmental operations were also moderately affected.

Although the local budget was up for second reading Monday, officials in their regular session of the Board of Mayor and Aldermen decided not to consider their $20.6 million budget, preferring to wait until the state’s budget situation became clear to them.

Late Wednesday, state lawmakers reached an agreement on a budget compromise to include, in brief, a 1 percent sales tax hike and increases on sin and business taxes. But officials weren’t taking any chances Monday.

“We can’t legally pass a budget that is not adequately funded and the budget proposed for 2002-2003 includes more than $1 million in state-shared taxes,” Mayor Royce Davenport said.

The $1 million figure represents the state sales tax and state income tax alone that is shared by the state with McMinnville. But the city actually receives $2.4 million, or about a fourth, of its general fund from the state from a variety of sources.

There is currently no clear indication of how the state budget compromise will impact the city’s bottom line. City Administrator Herb Llewellyn said officials would more carefully scrutinize any state action today, as city hall was closed yesterday.

As far as the state’s partial government shutdown that put about 22,000 workers state-wide on furlough beginning Monday, city hall officials could feel some of the heat just two days into it.

Llewellyn said Tuesday one example of the impact was the Barren Fork Greenway project, which was on hold pending a final review by the Tennessee Department of Transportation. “It started last week and we can’t bid that project,” he added.

In other matters Monday, city leaders said they want to look at the finances and legality of their agreement to turn over much of their share of the local option sales tax to the schools, which they said has been going on for 33 years since consolidation of city and county schools. They took no action.

Davenport said when the city turned over its schools, it turned over its debt as well as its share of that tax revenue. Currently, officials report the city receives 1/8 of 1 cent of the local option sales tax revenue. He said the idea surfaced because of the continuing threat of state shared taxes withholdings, which local officials have worried about for a number of years.