Below is a Kingsport Times-News article submitted by Alderman Ken Marsh. Also, there is a response to Alderman Ken Marsh’s article by Mayor Dennis Phillips, Vice Mayor Ben Mallicote, Alderman Munsey, Shupe, and Joh on the same day. It does seem strange that Mayor Phillips would know of Marsh’s letter. An explanation could be that Marsh could have shared it with Phillips or it was leaked after Marsh submitted it to the newspaper.
Alderman Marsh’s article to me comes across as rational and logical and he was respectful of BMA members by not naming and attacking them personally, whereas Mayor Dennis Phillips and gang comes across as attacking Alderman Marsh because his views are not shared by Mayor Phillips. Mayor Dennis Phillips’ attacking behavior and other BMA members is also displayed at BMA meetings. See “Mayor has hissy fit and attacks Alderman on TV”, “More hissy fits in Kingsport, Tennessee Board of Mayor and Aldermen”
Mayor Phillips talks about justifying the spending and the ability to pay. I am sure that there are banks, auto companies, insurance firms, investment firms, local business owners, Kingsport citizens. etc., who never thought the credit crisis would affect them. But we all have seen what has happened with all of the bailouts. Kingsport would be wise to back off and not be running near the ragged edge as far as debt is concerned.
The “gang of five” response is they do not intend to return money to the voters/taxpayers that put them in office. In fact, there seems to be an obsession with spending and they justify it as investing in the future. If things are going so well in Kingsport now as the “gang of five” wants us to think, then what is wrong with giving back to the taxpayers?
I am sure the “gang of five” does not want you to know about where the money is going to be spent. How about the $40,000 study for Kingsport as a wedding location or the $81,410 for a out of state firm to recommend directional signs for Kingsport (signs not included)? Kingsport spent $140,000 for a church with no clear use for it. I can name many more examples and my point is that with a single BMA meeting, they can vote to spend money and use up the yearly property tax revenue that MeadowView generates. The current MeadowView hotel generates $106,110 per year in property taxes for the city.
The “gang of five” article states “Through projects like the Center for Higher Education, the Aquatics Center, and the V.O. Dobbins renovations, we will continue to transform our workforce, improve our citizens’ quality of life, and revitalize our community. These are the kinds of projects Alderman Marsh would curtail going forward” I cannot find anywhere that Alderman Marsh voted against the Center for Higher Education. Alderman Ken Marsh voted against the Aquatic Center because of it’s linkage with the YMCA and Vice Mayor Mallicote also voted against it. Alderman Marsh stated that his opposition to V.O. Dobbins project began after it expanded beyond the concept originally planned and he touted this as an example of unintended consequences, in that entities already established downtown will be leaving to lease space in the V.O. Dobbins Center.
The “gang of five” response talks about the $43.8 million in September and October 2008 investments. But they don’t tell you about the $28 million tax break they gave Eastman.
I have put links into Mayor Phillips’ response so you can see for yourself what Alderman Marsh’s vote was, that Mayor Phillips said Marsh was against.
Also, see the following link for more background on MeadowView
Enough is enough…Ask for your money back!!
Alderman Ken Marsh Article
Kingsport residents should speak up and demand tax relief
Are your taxes being well spent? Would you like to see taxes reduced with no impact on essential city services? Do you believe there is room for better management in city government?
Money is the “mother’s milk of politics. We have all witnessed reckless spending in Washington. The sad results are all around us. Our financial day of reckoning is here. Fortunately, the Tennessee Constitution requires a balanced annual state budget. Local governments should track the state practices but, in Kingsport, we have set out on a course of unprecedented deficit spending.
It is called living beyond our means. In a word: debt.
In 1999, when I first was elected to the Kingsport BMA, we were essentially broke. Over the following seven years Mayor Blazier, city managers Billingsley and Griffin and the city council repaired the balance sheet, paired down debt, raised taxes, rates and fees to provide excellent services, upgraded and expanded schools and put local government on a solid financial footing. As former city manager Griffin said after the recovery plan was put in place “whoever is in my seat in 2010 is going to look like a hero.”
In 1999 any type of capital improvement, be it water, sewer, schools, public buildings, facilities – all had to be bonded. In other words, there was no cash. We were 100 percent deficit spending on capital projects. The recovery plan fixed that. Many capital projects can and are now funded with cash. We have significant pay as we go. But this is changing with the current administration.
Where total local debt could and should have been shrinking toward $100 million, we are on course for $190 million next year. And this ignores new projects that inevitably surface. Should we increase deficit spending in a time of unprecedented economic crisis? Two issues on the horizon could easily add $50 million to the $190 million the city fathers are already on course to borrow. It is possible that Kingsport will have a quarter billion dollars of debt in the next three years. Is this what we want?
Beginning in 2010 there will be a surplus of cash. Do citizens want it back or not? The city manager has laid out a plan to borrow and spend millions of dollars for new expensive public projects. These are not yet identified but staff and politicians will inevitably find a convenient way to borrow and spend your money. Cash in government creates a vacuum. Every vested interest rushes into the vacuum to seize cash for their pet project.
A current example is the Meadowview Executive Conference Center project – $15 million of new debt is planned by special interests when the money could be returned to taxpayers. After all, it was Kingsport taxpayers who voted to take the risk, tax themselves, and spend money to build, operate and subsidize the conference center. Meadowview is a resounding success. I am proud of Meadowview. However, taxpayers could now get a direct return on investment by a tax reduction.
The BMA recently refused to even consider returning the cash flow from the quarter-cent sales tax to taxpayers. Instead, in a hasty decision, the BMA, without substantive discussion of the project or attractive alternatives, voted to take taxpayer money and service the special interests who rushed into the vacuum created by paying down the original debt.
In government, unattached cash always gets spent. It is never returned to the taxpayers. Why should you accept this?
Debt paydown in FY2010 creates over $2 million annually in currently uncommitted cash, growing to over twice that sum in 2019. Here is another opportunity to provide broad based tax relief to our hard pressed citizens through a property tax reduction. This reduction can be accomplished without degradation of essential services. There will still be adequate resources for reasonable capital expenses, employee compensation, full city services and debt management without using the $2 million in uncommitted cash.
At the current city property tax rate of $2.30 per $100 adjusted valuation, a homeowner could realize a seven percent tax reduction each year starting in FY2010. When is the last time your government took less of your money? People on fixed incomes particularly benefit from tax reductions. That is money in a homeowners or small businessman’s pocket to pay down the mortgage or provide cash for other needs.
When is the last time your government took less of your money? People on fixed incomes particularly benefit from tax reductions. That is money in a homeowners or small businessman’s pocket to pay down the mortgage or provide cash for other needs.
Citizens, speak up. Ask for your money back. If you do not, the cash vacuum will simply result in more special interest projects. Do you want government spending more of your money or do you want to spend it yourself?
The choice is up to each of us. Speak up or pay the government.
Alderman Ken Marsh
Mayor Dennis Phillips Response
City government must maintain ability to invest in our future
What Alderman Marsh portrays as a painless cut in spending is actually a debilitating strike at our ability to invest in Kingsport’s future. The projects at which he aims his hatchet are long-range capital projects – projects that enable us to address our most crucial needs, and capitalize on our greatest opportunities.
Kingsport has made a stand with strategic investments that are diversifying our economy, creating jobs and recapturing business that once left for other areas.
Through projects like the Center for Higher Education, the Aquatics Center, and the V.O. Dobbins renovations, we will continue to transform our workforce, improve our citizens’ quality of life, and revitalize our community. These are the kinds of projects Alderman Marsh would curtail going forward.
At least in part due to initiatives supported by a majority on this board, Kingsport just recognized its seventh straight month of sales tax growth, up 7 percent since April, and at a time when the state is seeing dramatic budget shortfalls.
That is the kind of growth that keeps property taxes low for all of us.
We have other clear signs that we are on the right track – two straight years of record investment in our community,43.8 million in September and October 2008 alone.
We have 96 new single family housing starts for the year, and a new industrial facility that positions our manufacturing sector for success with an important new product.
New retail? We’ve added a sparkling new Food City, Panera Bread, Ulta, Decorator’s Warehouse and Best Buy this year alone.
Downtown development? The new Regional Center for Health Professions has nearly 400 students studying in areas of solid job growth – nursing and medical technology. At the same time, those students help support downtown restaurants and businesses.
Meanwhile, steel is rising on a new Higher Education Center that will raise Kingsport’s competitiveness yet again by helping our own earn a college degree.
Our citizens’ homes are the biggest investment most of them will ever make, and the only way we can protect that investment is to continue improving Kingsport.
And, while homeowners in other major metros are worrying about depreciation, Kingsport continues to rank at the top for housing appreciation.
Through prudent investment, the BMA has helped set the stage for expanded private investment. Meadowview – where Alderman Marsh opposes any further investment – is a perfect example: Since that facility was built, the surrounding property value has increased by approximately $80 million (and counting). That’s new jobs and a level of national recognition that never would have been possible before. On every front, we have received an outstanding return on the taxpayer’s investment.
Alderman Marsh also ignores basic economic theory in his comments on debt. In and of itself, debt is neither good nor bad. The key is how one uses debt.
Both in the public and in the private sectors, debt is used to accomplish strategic objectives that could not be accomplished if they had to be funded solely from available cash. To operate on a cash only basis would require punishing levels of taxation.
And, by every measure, including those by national firms that rate the quality of our city’s debt, Kingsport is in a very comfortable position to repay. At the same time, we ensure quicker repayment by utilizing 15 and 20 year instruments, instead of longer term options.
Every member of this board is extremely mindful of family budgets worked out around the kitchen tables of Kingsport.
And, despite Alderman Marsh’s protestations, we are and will remain well below the board’s conservative debt benchmark, 10 percent of the assessed value of the city.
As Alderman Marsh points out, the entire five year capital investment program fits within the existing budget, while debt service as a percentage of our overall budget will shrink every year going forward, providing flexibility for future boards.
As for our property tax rate, the combined city-county property tax burden remains reasonable, falling between Bristol and Johnson City, and 11 percent below the most comparable city in Tennessee, Oak Ridge.
That one board member might, at last resort, suggest tax cuts as a way of stopping projects he voted against in the minority is regrettable.
If we pull back, as advocated by Alderman Marsh, we will stop growing, and rest assured, any tax cuts would be short lived – to say the least.
Let’s reject the tombstone mentality of the past and cast our lot with those who choose to move forward.
Mayor Dennis Phillips
Vice Mayor Ben Mallicote
Alderman Larry A. Munsey
Alderman Jantry Shupe
Alderman Valerie Joh
Apparently, the announcement by Eastman Chemical’s $100 million cost reduction has gotten the attention of Mayor Phillips and City Manager John Campbell.
Vice Mayor Mallicote went on the attack with Mayor Phillips also jumping into the fray over remarks made by Alderman Shull. Everyone on the BMA should be able to state their views without being attacked.
