Court members are scheduled to vote on the tax rate and budget for the 2012-2013 fiscal year Sept. 28.
The court recently voted 4-1 to recommend increasing the tax rate from the current 47.01 cents per $100 valuation to 51.22 cents. The 51.22-cent figure would be 3.35 cents above the “effective tax rate”—the rate needed to generate the same amount of revenue as during the current budget year.
And the effective rate would be higher than the current 47.01-cent rate because mineral valuations have dropped.
County Judge Dean Fowler has said the court has cut his proposed $11 million budget to “the bone,” and that the proposed tax hike would be effective for only one year. It would pay off the county’s debt, he has said.
But the 18 citizens (counting an elected official) who addressed the court Friday at a meeting which drew more than 50 people seemed largely unsupportive of the increase, as had speakers at a Sept. 5 hearing.
At one point, Upshur County Democratic Party Chairman Dan Miles Jr. asked if the court was taking the citizens’ comments seriously or “just allowing us to vent.” Fowler told him the court was considering the remarks.
Much of Friday’s discussion centered around the possibility of reducing the county’s share of employees’ retirement costs. At one point, Pct. 4 Comm. Mike Spencer said perhaps the county should opt out of the state retirement system.
The county now deducts seven percent of an employee’s pay for retirement, and provides a $10.18 match for every $7 the employee pays in, according to Pct. 2 Comm. Cole Hefner.
But that $10.18 will increase to $10.70 during the coming fiscal year and to $14 eventually, making the county’s match $2 for each $1 the employee contributes, Hefner told The Mirror.
By state law, employees pay a maximum of seven percent and a minimum of four percent from their checks, he said Tuesday. If the county lowered the amount of its match to $6.63 for every $7 an employee paid, the county could save $250,000, said Hefner, who said he would definitely consider that, and/or lowering the employees’ contribution.
Hefner is the court member who voted against recommending the tax increase.
At Friday’s hearing, businessman David Fisher used the chalkboard in the Commissioners’ Courtroom to illustrate his contention that if all elected officials took a pay cut of some amount—and county employees paid only four percent of their wages toward retirement (thus lowering the county’s matching funds)—the court could save $650,000.
But “if we become insolvent. . . there’s no retirement,” Fisher warned, saying that has happened elsewhere. He also said he was talking to state officials about reducing retirement costs.
When some in the audience applauded Fisher, County Judge Dean Fowler stopped them, saying “none of that.”
Fowler said the county has $1.1 million in reserves, and denounced “scare tactics” which mention that governmental entities in other states have gone broke. He said the county was nowhere near that condition.
Another citizen opposing the tax hike, John Melvin Dodd, said, “We’ve got some people who in some cases can hardly pay them (taxes), or can’t pay them.”
Delia Creighton, a disabled veteran, said lowering the employees’ contribution to retirement puts “more money in their pockets” and reiterated her point from the Sept. 5 hearing that the “turnip” from which the county is drawing taxes is “drying up.”
Don McElvogue charged that with the exception of Hefner, the court had not addressed the “out of control cost” of the county pension plan. McElvogue disagreed with Fowler’s contention the proposed budget had been cut to the bone, and asked the court do so.
Dennis Milliron also urged the court look at employee benefits, including insurance. Fowler said at one point that county employees don’t pay for their own insurance, but do for family members’.
Fowler said a belief that the county is currently providing a $2 match to every $1 paid by employees for retirement is untrue. He said the employee contributes seven percent, the county 10.7 percent.
Said Upshur County Conservative Coalition Chairman Wayne Arnold, “We are not in the business of subsidizing retirement programs for employees, and that’s exactly what we’re doing.”
“I think you (county employees) ought to pay your fair share on your insurance just like the rest of us,” Arnold added.
But County Treasurer Myra Harris said the seven percent paid by county employees “comes off the top of their check.” If it is reduced to four, five or six percent, she said, the “county would see a bigger tax.”
She later told the court that 225 of Texas’s 254 counties use the seven percent figure, and that none use four percent.
Pct. 3 Commissioner-elect Frank Berka, who defeated incumbent Lloyd Crabtree in the May 29 Republican primary, expressed concern that the county’s match could increase to $2 for every $1 employees pay.
He said reducing employees’ contribution could let them put money in something tax-free.
Later in the meeting, Berka said the court could save $500,000 in retirement costs “if you’d listen to the citizens” and that current veteran employees would be only “minimally affected.”
Deputy Tax Assessor-Collector Donna Whitaker pointed out that county employees also pay taxes.
Pct. 1 Comm. James Crittenden asked Hefner at one point if his “mission” was partly or fully to “take away from part of what the employees are getting.”
Hefner replied his mission was to balance the budget “without a tax increase.”
“We have to take care of our employees,” he added. But Hefner implied there was no reason that other retirees who have “lost half of their life savings” should support something they themselves don’t receive.
Responding to Crittenden’s assertion earlier in the meeting that he was preaching “doom and gloom,” Hefner said “That’s a ridiculous statement.”
Crittenden asked Hefner why he had only given part of his salary back to the county rather than all of it. (Crittenden, unlike Hefner and Spencer, returns none of his salary back to the county, saying he works full-time for the county. Hefner and Spencer, who accept only part of their county salaries, do other work.)
“I’m not taking away from the employee,” Hefner said.
Lou Hewitt defended Hefner, saying “It’s not right for you all to jump on Cole for doing the right thing.” She accused other court members of wanting to raise taxes when citizens couldn’t attend the morning weekday meetings about the matter.
Fisher then praised Hefner for opposing the tax hike, asking “How many people are currently selling their homes and leaving this county?” Fisher also cited the closing of businesses in the county.
Fowler responded that the county’s population is increasing.
So is the poverty rate, Fisher replied.
Another citizen, 76-year-old Huey Mitchell, protested that a tax increase could cause him to raise rent to his tenants in the “poorest part of town” so much that they can’t stay in his homes.
As for the contention that the tax hike would be only temporary, Mitchell said, “Temporary taxes never seem to hold.”
Mrs. Richard Johnson said Hefner should not be “belittled” for having a mission as commissioner, and accused the court of not having handled money wisely.
“What makes us think giving you more (in taxes) is going to fix the problem?” Mrs. Johnson asked. “If you don’t have the money. . . you have to live with what reality is.”
Crittenden said taxes had been lowered all seven years he has served on the court and that some factors are beyond its control, such as the drop in mineral valuations this year.
He said several school districts have raised superintendent salaries and built football stadiums, and “there’s where your money (taxes) is increasing.” (Gilmer ISD, which recently approved revamping its football stadium, lowered its tax rate by one half cent this year.)
Discussing the court’s past action on taxes, Fowler said he lowered taxes to five percent below the “effective” rate his first year, and that the court had adopted the effective rate each year since, meaning there had been no tax hike in nine years.
Pam Dean, a deputy county Tax Assessor-Collector, addressed the question of the retirement benefits. She said her husband also works for the county and that they clear about $30,000 each in salary, so “the benefits is one of the reasons that drew us to (work for) the county.”
When retired New Diana School Supt. Norton Lovell suggested the court “grandfather” (exempt) current employees from any cut in benefits, Spencer and Hefner replied the county can’t.
Another man asked if the county had considered legalizing alcohol sales as a means of raising revenue (other than private clubs, alcohol sales are legal in Upshur County only in the city of Big Sandy). Nobody replied.
“Will y’all help us and not raise the taxes?” the man asked.
When Dodd said valuations have increased, thus raising taxes, Fowler replied that was incorrect. The problem for the county is the drop in mineral valuations, the judge said.
But Fowler said he couldn’t agree more with Dodd’s statement that citizens needed to take up certain financial issues with their state legislators and Congress.
Fowler said most property taxes are paid to cities and schools.
As the hearing neared its end, L. E. Rinehart alluded to the fact some county employees were present. He told the court it could look and see how many workers it could get rid of because the county was operating without them on the job.
After the 80-minute public hearing ended, the court began discussing Hefner’s proposal to cut costs of prisoner meals in the jail. He said he “tried to visit with” Sheriff Anthony Betterton, but “he refused to talk to me on this particular issue” when Hefner last attempted it.
Fowler said he already had cut the food budget by $35,000, but agreed to half the additional reduction Hefner recommended.