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See the local revenue numbers at center of school funding dispute

Posted at 12:12 am September 14, 2013
By John Huotari 12 Comments

Oak Ridge Schools Maintenance of Effort 2014

The maintenance of effort spreadsheet pictured above is used to determine whether local revenues for Oak Ridge Schools are the same from year to year. This spreadsheet, which includes some budget adjustments, shows a $250,000 shortfall. (Image courtesy Oak Ridge Schools/Karen Gagliano)

Note: This story was updated at 11:35 a.m.

It might be difficult to understand the concerns about Oak Ridge Schools’ funding and the state maintenance of effort test without seeing the local revenue numbers.

So, Oak Ridge Today has posted a copy of a maintenance of effort spreadsheet provided by Karen Gagliano, Oak Ridge Schools business and support services director. This spreadsheet includes budget adjustments that helped reduce the local revenue shortfall from the original $393,000 to a smaller $250,000.

Oak Ridge education officials have asked the city to cover that smaller shortfall to avoid a loss in state funding of $1.87 million per month and avert a school shutdown on Oct. 1. It’s the equivalent of a 2.5-cent property tax rate increase, although it’s too late for a tax increase this year. [Read more…]

Filed Under: Education, Government, K-12, Oak Ridge, Top Stories Tagged With: budget, funding, Karen Gagliano, maintenance of effort, MOE, Oak Ridge City Council, Oak Ridge Schools, per-pupil spending, revenue, shortfall

Guest column: The sky is not falling on school funding, city manager says

Posted at 12:04 pm September 10, 2013
By Mark S. Watson 1 Comment

Mark Watson

Mark Watson

The Sky is NOT Falling!

It is not often that a city manager takes the time to write an editorial, but I think this is one of those times.

These past two weeks, I have been working with new School Superintendent Bruce Borchers in reviewing a notice he received from the State of Tennessee that the financial formulas for required school funding have not been met by Oak Ridge. This principle is known as maintenance of effort.

Oak Ridge is one of the few school systems in Tennessee recognized as a city system. The school system is a “department” of the city for budgetary purposes.

Our school system has maintained itself through the years as one of the premier school systems in the state, and citizens here pay much more than the minimum requirements for school maintenance found elsewhere. However, with ups and downs of sales taxes and reductions in some state funding categories, the school and the city have found themselves calculated as coming up short in the statewide formula. This is the problem that Superintendent Borchers and myself find ourselves working together to resolve. With a solution, we will take that to our respective City Council and School Board. [Read more…]

Filed Under: Guest Columns, Opinion Tagged With: Bruce Borchers, maintenance of effort, Mark Watson, Oak Ridge City Council, Oak Ridge City Manager, Oak Ridge School Board, revenue, sales tax, school funding, Tennessee

UT professors study dilemmas in sustaining red light camera programs

Posted at 1:35 pm August 12, 2013
By University of Tennessee 14 Comments

Red Light Camera Study Table

This figure shows a list of measures and their effectiveness, safety impacts, and efficiency impacts. (Submitted image)

KNOXVILLE— It’s a common driving predicament: As you approach the intersection, the light is yellow. Do you hit the brakes or face a red light camera fine?

Some municipalities engineer their traffic signals to force drivers into this situation in an effort to generate revenue from the cameras.

Professors at the University of Tennessee in Knoxville have analyzed this issue to determine if traffic control measures intended to boost red light revenue—such as shortening yellow light time or increasing the speed limit on a street—compromise safety. [Read more…]

Filed Under: College, Education, Government, Top Stories Tagged With: Chris Cherry, Civil and Environmental Engineering Department, crash, fine, Lee Han, Qiang Yang, red light, red light camera, red light camera programs, red light camera systems, revenue, safety, Southeastern Transportation Center, traffic control measures, traffic engineers, traffic flow, traffic signal, Transport Policy, University of Tennessee, yellow light

Guest column: Hope proposes funding increases for fire station, economic development, maintenance

Posted at 10:36 am May 16, 2013
By Chuck Hope 4 Comments

Chuck Hope

Chuck Hope

Editor’s note: The following proposals by Oak Ridge City Council member Chuck Hope were first considered at the Monday, May 13, City Council meeting but postponed to a special meeting at 5 p.m. Thursday, May 16, in the Municipal Building Courtroom.

I would like to make a motion for an amendment to the ordinance to provide revenue for municipal purposes for the fiscal year beginning July 1, 2013, to increase the funding in the general fund in three critical areas.

The first area is in economic development. I would like to increase funding by $200,000 to strengthen our economic strategies that the city manager has proposed for the upcoming year. I would like to see an additional $75,000 be added to the Oak Ridge Chamber of Commerce contract to fully fund the three-part approach the city manager has developed, with the remaining $125,000 set aside to be used if any additional projects come forward this next calendar year.

The second part of this amendment would be to add $250,000 to the capital maintenance portion of our maintenance and operations (M&O) budget. We have several projects that will need to be updated and repaired this next year. If put off until further in the future, we will be doing these projects under a emergency situation, which always cost us more in repairs. It is essential that we maintain a proper M&O budget so we can get the most out of all of our city assets. [Read more…]

Filed Under: Guest Columns Tagged With: budget, capital maintenance, Chuck Hope, economic development, fire rate, Fire Station No. 2, funding, insurance, maintenance and operations, Melton Lake Drive, Oak Ridge Chamber of Commerce, Oak Ridge City Council, revenue

Guest column: Strategizing a path to prosperity

Posted at 9:34 am May 6, 2013
By Trina Baughn 25 Comments

Trina Baughn

Trina Baughn

The problem

This month, the Oak Ridge City Council will establish your property tax rate for 2014 via the approval of our annual city budget. And though it appears that taxes will remain flat, our excessive spending levels are unsustainable and continue to hinder our ability to compete with surrounding communities.

In spite of all the new developments happening as of late, if council approves the budget as proposed, residents and businesses will continue to feel the financial crunch for quite some time. Not only will we retain one of the highest property tax rates in the state, but we’ll also retain one of the largest per capita debt levels in the region. (At nearly $7,000 per person, we have more than four times that of Knox County residents and more than seven times that of Knoxville residents). A dozen more chicken places and grocery store relocations won’t make a dent in the average Oak Ridger’s bills.

If we are to make any kind of progress, we need a strategy that aims to increase revenue while reducing expenditures. This column will focus on increasing our revenue base. I will address budgetary inefficiencies and waste in a follow-up piece next week. [Read more…]

Filed Under: Guest Columns Tagged With: blight acquisition, city-owned assets, debt, exempt property, expenditures, golf course, nonprofits, Oak Ridge Chamber of Commerce, Oak Ridge City Council, Oak Ridge Industrial Development Board, payment in lieu of taxes, PILT, property tax rate, property taxes, real estate, residential properties, revenue, spending, tax abatements, taxable properties, Trina Baughn

Guest column: The velocity of money is 70 mph

Posted at 9:58 am March 5, 2013
By Oak Ridge Today Guest Columns 34 Comments

By Pat Fain and Leslie Agron

The usual theory behind economic development for a community is that the local economy is too small. So, economic development experts seek to bring in new companies, especially industrial ones, to enhance that economy. The theory is that increased local purchases by new companies and their employees are multiplied several times as the money spreads throughout the community. Every additional purchase results in additional sales tax from the same original dollar that exited the new company. Companies that manufacture goods or provide services externally have the greatest value theoretically as they actually bring new money into the community. The rate at which this happens is called the velocity of money.

In Oak Ridge, however, the size of the economy that occurs within our city limits is enormous for our population. The problem for Oak Ridge is that much of that economy occurs within non-taxable institutions and the vast majority of their staff does not live in Oak Ridge. Thus, in Oak Ridge the velocity of money is 70 mph—the speed at which those folks are cruising down Interstate 40 on Friday evening as they take their paychecks home!

[Read more…]

Filed Under: Guest Columns Tagged With: economic development, economic growth, economy, federal facilities, Leslie Agron, Oak Ridge, Pat Fain, property taxes, residents, revenue, sales taxes, tax revenues, velocity of money

Report: Slower economic growth in 2013, followed by increase in 2014

Posted at 11:55 am February 6, 2013
By University of Tennessee Leave a Comment

KNOXVILLE—The U.S. and Tennessee economies continue to dig their way out from the Great Recession, but they will be digging at a slower pace this year than last.

The debate over the nation’s debt ceiling, the looming risk of sequestration of federal spending, and the payroll tax increase contribute to the slowdown in predicted gains, according to the forecast in the 2013 Economic Report to the Governor of the State of Tennessee, released today.

The study, prepared by the Center for Business and Economic Research, or CBER, at the University of Tennessee in Knoxville, predicts the trajectory of the state and national economies by examining many economic and fiscal factors and trends.

[Read more…]

Filed Under: Business, Top Stories Tagged With: 2013 Economic Report to the Governor of the State of Tennessee, CBER, Center for Business and Economic Research, debt ceiling, e-commerce, economic growth, economies, federal spending, Great Recession, housing, job growth, Matt Murray, payroll tax cut, payroll tax increase, revenue, sequestration, Tennessee economy, unemployment, University of Tennessee

Guest column: Changing the economic development game in Oak Ridge

Posted at 8:32 pm February 5, 2013
By Trina Baughn 14 Comments

There’s no nice way to spin it: The results of our city’s bad decisions for the past decade are catching up with us.

In addition to having high debt and property taxes, our sales tax revenues continue to decline, we are exporting more than $727 million per year in U.S. Department of Energy payroll (1), and we have a comparatively stagnant population growth. Even with all the new restaurants opening, these projects won’t fully replace the revenue we’ve lost from the countless businesses that have closed up shop or left town for greener pastures.

Continuing down this path is not an option. Thankfully, our city manager understands this and wants to strategize a more competitive position for Oak Ridge. He is proposing that we change our approach to economic development (2) by finding other uses for the $1-2 million we’ve been spending annually on nearly 20 different external organizations like the Oak Ridge Chamber of Commerce.

[Read more…]

Filed Under: Guest Columns Tagged With: budget, business tax burden, business-friendly, community allure, competition, debt, economic development, Economic Diversification Fund, economic vitality, Farragut, marketing, Oak Ridge, payroll, population growth, property taxes, revenue, sales tax revenues, services, The Beacon Center of Tennessee, Trina Baughn, U.S. Department of Energy

Guest column: Oak Ridge has growth potential in sales tax revenue

Posted at 9:20 pm November 10, 2012
By Chuck Hope 1 Comment

Editor’s note: The following is an edited version of a statement Oak Ridge City Council member Chuck Hope made during a candidates forum before the Nov. 6 election.

Why do I want to be on City Council? Because Oak Ridge has given me so many opportunities and provided for my family for over 30 years, I want to make sure that the next generation has those same opportunities.

How do we make sure those opportunities are available for the next “Oak Ridgers”?

We start by making sure we keep a close watch on our revenue and expenditures. We need to understand that we really only have two main sources of revenue that come into the city. They are our property taxes and our sales tax revenue.

As most of you know, our property tax rate is higher than our surrounding cities and towns. However, compared to other “full service cities,” ours is comparable. There are only a handful of these “full service cities” all across Tennessee.

But before we can start to really change the rate, we must first find revenue from other sources. Where we have the most potential for growth in revenue is in the sales tax revenue we generate. For a city our size and with the economic drivers that we provide to the region, we should be bringing in a substantially larger portion of sales tax revenue.

We must find ways to increase our sales tax revenue before we can start to reduce our property tax rate. This is where I will focus my energy. To do that, we must continue to find ways to bring in more retail options (both restaurants and shopping choices), continue to work closely with the Industrial Development Board, Chamber of Commerce, and Economic Partnership to bring additional private investment capital and jobs, then make sure the Economic Diversification Fund is working for us.

Once we get the sales tax revenue growth improving, we can then start to look at ways to reduce our property tax rate so we can be competitive within our region. All the while making sure we are diligent and remember our expenditures and stay within our annual budget. We are always looking for ways to streamline our costs while maintaining our quality-of-life services.

But one of our biggest attributes the city needs to pay close attention to is our school system. It is still the biggest reason young families come to Oak Ridge, and it is the benchmark all other education systems set the bar to. But if we don’t continue to work with the school board and find solutions to some real issues before us, other communities will close the gap, and we may never be able to set the bar high enough again.

As you can see, City Council has many challenges before them, and I believe I can contribute to finding solutions to these issues. With your support and input, I will bring my business sense to council.

Chuck Hope

Oak Ridge

Filed Under: 2012 Election, Guest Columns Tagged With: Chuck Hope, election, Oak Ridge City Council, property tax rate, revenue, sales tax, school system, taxes

Council candidates say city’s cost, housing, revenues are top issues

Posted at 8:49 am November 1, 2012
By John Huotari 6 Comments

Note: This story was updated at 2:03 p.m.

Early voting for the Nov. 6 election ends today, and the ballot includes five candidates running for three seats on Oak Ridge City Council.

The five candidates were asked to define the city’s biggest problem during a League of Women Voters forum last month. Two named revenues, one mentioned housing, another talked about repopulating the city as the original generation ages, and the last said the city is too expensive.

The five candidates are the three incumbents—Charlie Hensley, Chuck Hope, and Ellen Smith—and two challengers, Trina Baughn and Kelly Callison. [Read more…]

Filed Under: 2012 Election, Government, Top Stories Tagged With: candidates, housing, Nov. 6 election, Oak Ridge City Council, revenue, sales tax revenues

Guest column: Does Oak Ridge have a revenue or spending problem?

Posted at 12:49 am October 23, 2012
By Trina Baughn 17 Comments

We here in Oak Ridge are repeatedly told that we do not have a debt problem, we have a revenue problem. All of our issues can be solved simply by increasing our revenue. Translation: The city needs more of your money.

The truth is, revenues aren’t down. They are actually up by $55 million for the last 10 years.

The data shows that our root problem is not revenue-based but spending-based. Oak Ridge is the single highest taxed full-service city in the state. We have priced ourselves out of consideration, sight unseen, to new residents and businesses. Every year for the last decade, we have knowingly budgeted to spend more than we bring in (see tables below). How do we make up the self-created deficit every year? Simple. We incur debt, and we deplete reserves.

Over the last decade, over 21 million of your tax dollars have been spent in the name of economic and community development. This is in addition to the dozens of tax breaks that we’ve given to select businesses. Every way that there is to throw money at our problems, we have done it.

Yes, we have some recent developments that we can celebrate. But we need to be realistic about their impact. For each new store, how many have quietly closed up shop and left town? And how many years before we see the projected new revenues?

It is time for a serious strategy change. We cannot possibly expect to attract new residents and new businesses as long as the very people who live here say that they can no longer afford to stay. If we are to achieve any substantial progress, we have to become competitive. It is time to stop throwing money at our problems. There is only one way that city council can truly improve our economy and that is by leveling the playing field with our competitors by lowering our property tax rate, lowering our debt, and lowering our spending.

 

Ten Year Snapshot

2002

2012

Total Revenues

$118M

$173M

Total Expenditures

$135M

$179M

Total Debt

$104M

$186


City of Oak Ridge Budgeted Revenue and Expenditures

 

Revenues

Expenditures

2002

$118M

$135M

2003

$120M

$152M

2004

$126M

$134M

2005

$126M

$134M

2006

$131M

$177M

2007

$137M

$184M

2008

$145M

$184M

2009

$164M

$183M

2010

$172M

$179M

2011

$173M

$179M

2012

$173M

$179M

Source: City of Oak Ridge Final Budget for years 2002-2012

http://www.oakridgetenn.org/department/Finance/content.aspx?article=1853

Filed Under: 2012 Election, Guest Columns Tagged With: debt, revenue, spending, Trina Baughn

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Availability of the draft environmental assessment for off-site depleted uranium manufacturing (DOE/EA-2252)

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