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In an effort to stave off a financial shortfall and avoid a property tax increase to offset it, the Franklin County Finance Committee has adopted a move to include anticipated sales tax growth in balancing the county’s budget.

Commissioner David Eldridge made the following motion, seconded by Commissioner Dale Schultz, at the Finance Committee’s April 6 meeting:

“To comply with the maintenance of effort, the total budgeted 2024 local sales tax revenue will remain the same as the 2023 level. The following will also apply. The 2024 local option sales tax budget will be increased above the 2023 level to include reasonable anticipated 2024 growth. The 2024 property tax budget will be equally reduced from the 2023 level to offset this local option sales tax growth.”

Franklin County Director of Schools Stanley Bean was the only Finance Committee member to vote against the motion.

The County Commission will consider later whether to adopt the Finance Committee’s motion.

Eldridge told the Finance Committee on April 6 that the School System has never included anticipated sales tax growth as part of its budget process. He added that the school’s budget has always been set using sales tax figures from the previous year, although receipts have traditionally increased annually.

The county, according to state law, is required to follow a “maintenance of effort” plan where it cannot provide the School System with less money than it did in the previous budget year.

Eldridge said the additional sales tax revenue the School System has been receiving has increased the annual maintenance of effort required by the county.

He explained the School System’s maintenance of effort includes a combination of local taxes involving property and sales taxes and other fees included in the total.

Eldridge said that since the School System’s budget has not included anticipated sales tax growth at the outset, the school-fund balance has increased annually.

He said that if the anticipated sales tax growth were included in the budget, the property tax amount could be reduced, and the sales tax growth could be used in other areas of the budget with the county still complying with the maintenance-of-effort requirement.

“We don’t need to be raising taxes when there’s money there that could have been used up front,” Eldridge said.

He said the School System, which received $49.9 million of the county’s $90.8 million in appropriations in the 2023 fiscal year, has seen its fund balance — money left over from the previous budget cycle — increase from $3 million to $11 million in the past five years.

Bean said the School System is facing financial obstacles, and it’s not clear what money it will be receiving from the new Tennessee Investment in Student Achievement program.

The School System has been getting about $27 million of its $49.9 million overall budget from state Basic Education Program dollars. However, the state has abandoned the BEP, replacing it with the TISA program which has been deemed to update the way Tennessee funds public education for the first time in more than 30 years.

Program officials have said TISA updates the way Tennessee invests in public education by moving to a student-based funding formula, which includes:

— A base funding amount for every public-school student.

— Additional weighted funding to address individual student needs like those students who may be low-income, have a disability, be gifted, have characteristics of dyslexia or live in a sparse community.

— Additional direct funding intended to support students in key priority areas like early literacy, CTE programming and high-dosage tutoring.

— Outcome incentives based on student achievement to empower schools to help all students reach their full potential.

While the objectives may sound good on paper, what the School System will receive through the new program is unclear.

Bean has said the initial word is that Franklin County could be getting up to $4 million more through the new program. However, he said that until the state releases the figures, the School System will not know what funding may be available to work with.

Meanwhile, the county government has been eyeing across-the-board employee pay increases, but for how much has been another issue.

The Finance Committee adopted a 10 percent pay-increase recommendation at its March 7 meeting, but School Committee members questioned going that high at their March 14 meeting. The ultimate decision on what will happen will be decided by the full County Commission in the next few months.

School Committee Chairman William Anderson said a 10 percent pay increase would be difficult for the county to fund. He recommended the county stay with an 8.7 percent increase approved recently at the federal level as a cost-of-living increase for Social Security beneficiaries amid times of extremely high inflation the nation hasn’t seen in four decades.

School Board members have said Franklin County trails other surrounding counties in teacher compensation. Even if the 8.7 percent pay increase were approved, the other school systems would probably do the same, and Franklin County’s teachers would continue to remain behind in compensation, they said.

School Board members have said the system is losing high-quality teachers to the other systems because of the pay differences, and something needs to be done as an incentive to retain them.

Eldridge said on April 6 that the School System and county leaders have been defining pay raises in different terms. He said when step increases are included for teachers along with the 10 percent increases, some are getting between 12 and 14 percent in total.

“We need to have an understanding,” he said.