Analysis Of Morristown

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Budget Analysis of Morristown, TN Like a majority of state and local governments, the City of Morristown raises revenue through taxation, fees, grants, and issuing bonds for capital projects (City of Morristown, 2017; Hyman, 2014). Like a vast majority of the United States, the "Great Recession" impacted the budget of Morristown, primarily through a loss in the city's manufacturing base (City of Morristown, 2017). Thankfully, since the end of the "Great Recession" Morristown finds its economic situation improving, which can be viewed through an analysis of the city's budgets from 2015 to the present. Revenue Trends Revenue Source: 2015-16 2016-17 2017-18 Net Increase/Decrease Property Tax $8,835,000 $10,510,000 $10,610,000 $1,775,000 …show more content…

This tax rate increase along with other revenue sources, including grants from the Tennessee Department of Transportation (TDOT) completely funded a one year, $2,000,000 paving project (City of Morristown, 2017). Per TN state law, property tax rates have an inverse relationship an aim to stay revenue neutral in regards to budgeting (City of Morristown, 2017). This means that when property values increase, the tax rate is reduced. The rational for this stems from the fact that when property values decrease, the tax rate is increased in order to maintain the same revenue from prior years (City of Morristown, 2017). While the property taxes are supposed to be revenue neutral per state law, the city's actions may seem wrong. However, the City of Morristown (2018) points out: It should be noted that incentive programs such as Tax increment financing (TIF) payments for major commercial developments and PILOT (Payment-in-Lieu-of-Tax) programs for industrial projects partially offset this growth in revenue. The cost of these programs is shown as an expense in the special appropriations section of the budget. The increase in the tax rate resulted in new revenue of about $750,000 above the growth of property tax revenue from development. (p. 53) The two main areas that saw decreases in revenue over the past three years are licenses, permits, and fees along with intergovernmental revenue. The

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