Threatened with state takeover, Hawkins County approves $40 wheel tax

The Hawkins County Commission approved a $40 wheel tax increase on Monday to avoid a threatened takeover of the county’s financial affairs by the state comptroller’s office, reports the Kingsport Times-News. But that doesn’t necessarily resolve the county’s budgeting troubles.

Now the Hawkins County Commission must wait 30 days to see if 1,095 registered Hawkins County voters, which is 10 percent of the Hawkins County voters who cast a ballot in the last gubernatorial election in 2014, sign a petition to require a special election referendum to let the county’s voters decide the fate of the wheel tax increase.

…County Finance Director Nicole Buchanan told the commission during Monday’s meeting she had been in contact with the state comptroller’s office that day.

If the petition is successful, a special countywide election would have to be held within 75-90 days. As a result, Hawkins County wouldn’t be generating revenue for as much as six months into the 2017-18 fiscal year.

The purpose of the tax increase was to eliminate a substantial revenue deficit, which at last report stood at $1.6 million. The state comptroller’s office told the commission it must approve a balanced budget by July 1 or face a state takeover of the budget.

If the wheel tax stands and there is no referendum, the commission achieved that goal Monday night.

If there is a referendum, however, Buchanan said she was told by the comptroller that the 2017-18 budget is out of balance again, and the commission must approve a property tax increase by the end of August.

Monday’s Hawkins County Commission meeting was described as “chaos” and “confusing” by some who watched live on the Times-News Facebook page…. (The commission initially rejected the wheel tax increase, then debated a 22-cent property tax increase, then returned to the wheel tax and approved it on second try.)

…Where the $40 wheel tax increase would generate about $2.1 million in new revenue, a 22 cent property tax increase would also balance the budget by generating about $2.2 million…. The wheel tax had been touted as the more fair mode to generate new revenue because it spreads the tax burden to more people, not just property owners.

For a residential property valued at $100,000, a 22 cent property tax hike would increase the annual bill by $55… (With a $40 wheel tax increase, it would) cost $96 to tag a vehicle in Hawkins County. That will give Hawkins County the 10th highest wheel tax rate out of Tennessee’s 95 counties. 

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Former Knoxville News Sentinel capitol bureau chief Tom Humphrey writes about Tennessee politics, government, and legislative news.
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