No WhiteWash!

NASHVILLE – Tennessee revenue collections continued to decline in April, once again falling short of budgeted estimates. Finance and Administration Commissioner Dave Goetz reported today that overall April revenues were $1.216 billion, which is $189.6 million less than the state budgeted.

“April is the ninth consecutive month this fiscal year that we’ve seen negative growth in sales taxes and corporate income taxes compared to a year ago.” Goetz said. “In fact, we’ve seen negative growth in sales tax collections for 14 of the past 16 months – since January 2008.”

On an accrual basis, April is the ninth month in the 2008-2009 fiscal year.

The general fund was under collected by $164.3 million, and the four other funds were under collected by $25.3 million.

Sales tax collections were $74.5 million less than the estimate for April. The April growth rate was negative 9.94%. For nine months revenues are under collected by $466.9 million. The year-to-date growth rate for nine months was negative 6.73%.

Franchise and excise taxes combined were $56.6 million below the budgeted estimate of $387.8 million. For nine months revenues are under collected by $258.0 million.

Hall Income tax collections for April were $32.2 million less than the estimate. For nine months collections are $36.2 million less than the budgeted estimate. The growth rate for the nine month period was negative 23.27%.

Inheritance and estate tax collections were $3.8 million below the April estimate. For nine months collections are $10.8 million under the budgeted estimate.

Gasoline and motor fuel collections for April increased by 0.77%. For nine months revenues are negative 6.22%, and $37.0 million below the budgeted estimate of $641.5 million.

Tobacco tax collections were $11.6 million under the budgeted estimate of $30.2 million. For nine months revenues are under collected in the amount of $20.4 million.

Year-to-date collections for nine months were $887.6 million less than the budgeted estimate. The general fund was under collected by $807.9 million and the four other funds were under collected by $79.7 million.

The budgeted revenue estimates for 2008-2009 are based on the State Funding Board’s consensus recommendation adopted by the second session of the 105th General Assembly in May of 2008.

The revised estimates for this fiscal year as presented in the 2009-2010 Budget Document assume an under collection in total taxes in the amount of $1.1 billion. The general fund under collection is projected to be $1.06 billion.

By tax source the assumed under collections are: Sales tax $544.2 million; F&E taxes $336.1 million; privilege taxes $80.6 million; hall income tax $58.0 million; highway fund road user taxes $48.6 million; and a net under collection of$40.0 million from all other tax sources.

via April Revenues | TN.gov Newsroom.

Continuing a commitment to government transparency, Governor Phil Bredesen today announced a new TN.gov Web site where citizens can see how tax revenues are spent.  The new site is www.tn.gov/opengov.

“This makes it easier for taxpayers to access information by aggregating data in a centralized place on the state’s Web site,” Bredesen said. “The commitment to openness and transparency I made from the beginning of my administration takes another important step forward with the introduction of this new tool for citizens to access information about state spending.”

Information available at Tennessee’s Open Government site includes:

• Vendor payments, organized quarterly and by department
• Travel expenses paid to all state workers, including cabinet-level out-of-state travel
• Employee salary information

The site is managed by the Department of Finance & Administration, which includes the state’s budget office, the state accounting and payroll divisions as well as the state’s information technology network.

“Establishing this site to make basic information available to taxpayers is part of our continuing effort to make it easier for citizens to see how their taxpayer dollars are being used,” Commissioner Dave Goetz said. “We look forward to gathering input from the General Assembly and citizens of Tennessee as we develop the next levels of information we can make available online.”

The new site brings together information already available, but now accessible at one location, such as public meetings involving state agencies, state audits and financial reports, state contract opportunities and tax collections, as well as budget information.

Citizens can also access a link on the site to give feedback to state officials on the information made available, and what they’d like to see made available as the site matures.

Since taking office in 2003, Bredesen has pushed open the doors of government spending by holding open budget hearings, streamed live on the Internet.  Bredesen also led the move toward a higher level of ethics in government by establishing an ethics committee in 2003 that led to the creation of the Tennessee Ethics Commission.  He set new demands for disclosure from executive branch leadership employees and also pushed for more online access to information related to physicians and health care facilities, as well as information on certain criminal offenders.

Ben Mallicote seems to be in a tight spot in this election over his vote to refuse to give the regional sales tax back to the citizens via a property tax deduction after it had served its purpose.  Alderman Marsh and Alderman Shull voted to give the tax back to the citizens.

I had a chance to watch the video of the Rotary Club debate on cable channel 16 and it was very clear to me that he was trying to justify his vote on the regional sales tax issue.  Mr. Mallicote, why didn’t you not at the time of your vote bring up the same reasons as you did in the Rotary Club debate.

Alderman candidates debate what’s best for city at Kingsport Rotary Club

Kingsport Times-News

Mallicote, also first elected to the BMA four years ago, said you couldn’t consider Shull’s suggestion without considering the cost and trade-off.

“In the midst of this great housing crisis, Kingsport is third in the nation in home price appreciation. When other municipalities are seeing double-digit drops in sales tax collections, Kingsport is seeing double-digit increases,” Mallicote said. “Without the investment this board has made, we wouldn’t have Target, the new Food City, East Stone Commons, all of the new residential options, the higher education and allied health facilities, the revitalization of downtown, the new concert series, and a nationally recognized school system.

Mr. Mallicote mentions double-digit sales tax collections, but I doubt he can back up that statement with data.  See previous post that debunks this statement.  I am sure that Pat Shull is is thankful that Mallicote mentioned all of the other investments that Pat Shull voted for.

Mr. Mallicote again I feel is on the defensive in the radio interview on WJCW on April 23 concerning the regional sales tax.

Could it be that Mallicote does not have the security of the other four members of the Gang of Five to help him defend his vote?   Phillips,Joh,Shupe, and Munsey also voted against giving the regional sales tax back to the property owners.

The October 21, 2008 BMA meeting got a little heated with Vice Mayor Ben Mallicote going on the attack when Marsh and Shull attempted to state their views in a business like way.

See the November 11, 2008 post below for more information.

Click on the More Info button for all posts that discuss  Ben Mallicote

Kingsport, Tennessee BMA refuses to rescind Regional Sales Tax after it had served it’s purpose

Alderman Marsh presented a resolution at the October 21, 2008 Kingsport Board of Mayors and Aldermen to eliminate the quarter percent sales tax that voters approved in 1992 to fund the Meadowview Convention Center.  The quarter percent regional sales tax had served it’s purpose and the convention center debt was paid off in 2008.

The resolution was to use a portion of the regional sales tax to reduce the property tax rate for citizens. The citizens of Kingsport could have received a reduction in their city property tax, but the resolution was quickly voted down by the “gang of five”. (Mayor Dennis Phillips, Vice Mayor Mallicote, and Aldermen Munsey, Joh, Shupe)  See Kingsport Times-News article  “Marsh urges scuttling MeadowView expansion

The decision of the “gang of five” showed their true colors by voting against the citizens for a property tax refund and instead voting for special interest groups.

Alderman Shull and Marsh have in the past tried to discuss the future of the regional sales tax, but Mayor Phillips would always table the discussion.  It is my feeling that Mayor Phillips had no intention of ending the regional sales tax and had plans to use it for MeadowView Convention Center expansion.

The October 21, 2008 BMA meeting got a little heated with Vice Mayor Ben Mallicote going on the attack, Alderman Joh stated that Aldermen Shull and Marsh were just sore losers.  Mayor Phillips stated that without MeadowView the city would have to raise taxes.  He also made a statement that MeadowView is needed to keep from reducing police and fire protection and doing trash pick-up every two weeks. Mr. Mayor, stop the spin, it may be news to you, the convention center has been operating at a loss and the taxpayers are in fact keeping the convention center in business.  The voters of Kingsport are smarter than you think, Mayor Phillips.

Maybe, I will in the future do a post about the wasteful spending in the City of Kingsport by Mayor Phillips and his gang.

Famous Quotes from the Kingsport Board of Mayor and Aldermen

Mayor Dennis Phillips – ‘We need MeadowView to keep from reducing fire, police protection, and reducing trash pick-up to every two weeks.” October 21, 2008

Mayor Dennis Phillips –“We need to annex so we don’t have to raise taxes”  February 5, 2008

Alderman Munsey – “We need to do the MeadowView expansion to keep from raising taxes” September 15, 2008

Alderman Munsey – Debt is neither good or bad,”   June 3, 2008

Vice Mayor Mallicote – “I do not believe all of the doom and gloom about the economy”.  June 3, 2008

Mayor Dennis Phillips – “If the taxpayers wanted the city to cut the spending, then we could collect garbage every other week”  June 3, 2008

Mayor Dennis Phillips – “If there were no money to spend, then you would not need politicians”  October, 2007

On September 16, 2008, the Kingsport, Tennessee Board of Mayor and Aldermen voted to spend $819,000 for an architect to design the $15 million expansion at the Meadowview Conference Resort and Convent Center.  This was brought quickly to a vote without much detailed discussion or input from the public.  There were discussions on using the regional sales tax to fund the convention center expansion.

Again, this vote was another example of railroading a vote.  Alderman Marsh expressed concern that this was voted on within 24 hours and that there had not been ample time to study the the financial numbers.  He also asked what is in it for the citizens of Kingsport.  He said that this is more for the special interests of certain people.  He attempted to defer the vote to the latter part of October, but Alderman Marsh’s and Alderman Shull’s votes were not enough to postpone the vote.

Simply put, this is an example of the City of Kingsport catering to special interest groups and there seems to be no value to the citizens of Kingsport.  See posts Kingsport, Tennessee incestuous relationship with special interest groups, Convention Center issues plague cities, and More hissy fits in Kingsport, Tennessee Board of Mayor and Aldermen for more background information.

What are you views on the action of the BMA to not give back to the taxpayers the regional sales tax?  Leave a comment.

Ben Mallicote, who is running for re-election as a Kingsport Alderman made the following statement at a recent Rotary Club Debate that was moderated by candidate Dennis Phillips who is running for re-election as mayor.

“When other municipalities are seeing double-digit drops in sales tax collections, Kingsport is seeing double-digit increases,” Mallicote said.

I would like to suggest to Mr. Mallicote that he become more familiar with the city’s finances before making such a statement.  Take a look at the data below and one can see that Kingsport has not seen double-digit increases in sales tax collections.

The retail sales data is from the following link.  Tri-Cities Retail Sales Report

Using the Kingsport retail sales dollars and applying the yearly inflation percent tells a different story.  Note the “% Growth after Inflation” column below in orange tells a different story.  The year 2003 had a positive growth of 2.53% after inflation was applied.

One can say that the retail sales for Kingsport in 2001 actually meant more for the city in buying power than the current retail sales numbers.

The graph below needs no explaining and one can see that Kingsport is not as progressive as we are led to believe.

Click on the More Info button for all posts that discuss Ben Mallicote

NASHVILLE, Tenn. – Tennessee revenue collections continue to fall short of budgeted estimates. Overall March revenues, which reflect February sales, came in $106.2 million less than the state budgeted for, with collections totaling $779.5 million.

“March is the eighth consecutive month this fiscal year in which sales taxes and corporate income taxes have recorded negative growth over a year ago.” Goetz said. “March also becomes the thirteenth negative growth month for sales tax collections out of the last fifteen months, starting with January 2008.”

On an accrual basis, March is the eighth month in the 2008-2009 fiscal year.

The general fund was under collected by $100.4 million and the four other funds were under collected by $5.8 million.

Sales tax collections were $57.7 million less than the estimate for March. The March growth rate was negative 8.94%. For eight months revenues are under collected by $392.4 million. The year-to-date growth rate for eight months was negative 6.32%.

Franchise and excise taxes combined were $34.8 million below the budgeted estimate of $166.5 million. For eight months revenues are under collected by $201.4 million.

Gasoline and motor fuel collections for March decreased by 5.82%. For eight months revenues are under collected by $36.8 million.

Tobacco taxes collections were $4.3 million under the budgeted estimate of $28.0 million. For eight months revenues are under collected in the amount of $8.9 million.

Year-to-date collections for eight months were $698.0 million less than the budgeted estimate. The general fund was under collected by $643.6 million and the four other funds were under collected by $54.4 million.

The budgeted revenue estimates for 2008-2009 are based on the State Funding Board’s consensus recommendation adopted by the second session of the 105th General Assembly in May of 2008.

The revised estimates for this fiscal year as presented in the 2009-2010 budget document assume an under collection in total taxes in the amount of $1.1 billion. The General Fund under collection is projected to be $1.03 billion.

By tax source, the assumed under collections are: sales tax $544.2 million; F&E taxes $336.1 million; privilege taxes $80.6 million; income tax $58.0 million; highway fund road user revenues $48.6 million, and a net under collection of $40.0 million from all other tax sources.

via March Revenues | TN.gov Newsroom.

Middle Tennessee State University has done a great job analyzing the housing market in Tennessee for the 4th quarter, 2008.  In the link below they give data on employment, permits, repeat sales, mortgage tax collections, transfer tax collections, foreclosures, and inventory.

The fourth quarter was difficult for the Tennessee economy.  The increase in job losses will create a substantial headwind for the housing market. Although mortgage rates are extremely low, a decline in household confidence along with falling housing prices will likely keep many home buyers on the sidelines. The inventory of foreclosures will continue to rise, as indicated by the rising number of new foreclosures.  Home sales continue to fall, putting downward pressure on prices. Since supply is falling faster than demand, the inventory of homes on the market is declining. The scarce good news is the increase in multi-family permits.  Read more on Tennessee Housing Market

NASHVILLE - Overall January revenues were $936.4 million, which is $114.3 less than the state budgeted, reflecting dismal holiday retail sales for Tennessee as well as continued weakness in consumer confidence.

“January is the sixth consecutive month this fiscal year in which sales taxes and corporate income taxes have recorded negative growth over a year ago.” Finance and Administration Commissioner Dave Goetz said. “January is also historic in that it represents the eleventh negative growth month in sales tax collections out of the last thirteen months, starting with January 2008.

“We will continue to be diligent in monitoring our spending in order to end the fiscal year with a balanced budget as required by the state’s constitution,” Goetz said.

On an accrual basis, January is the sixth month in the 2008-2009 fiscal year.

The general fund was under collected by $102.7 million and the four other funds were under collected by $11.6 million.

Sales tax collections were $68.4 million less than the estimate for January. The January growth rate was negative 6.87%. For six months revenues are under collected by $280.9 million. The year-to-date growth rate for six months was negative 5.72 %.

Franchise and excise taxes combined were $26.6 million below the budgeted estimate of $150.3 million. For six months revenues are under collected by $162.3 million.

Gasoline and motor fuel collections for January decreased by 11.2 % and were $8.9 below the budgeted estimate of $72.2 million. For six months revenues are under collected by $33.7 million.

Tobacco tax collections were $3.3 million below the budgeted estimate of $24.8 million, and for six months they are $5.7 million under the budgeted estimate.

Year-to-date collections for six months were $522.1 million less than the budgeted estimate. The general fund was under collected by $482.1 million and the four other funds were under collected by $40.0 million.

The budgeted revenue estimates for 2008-2009 are based on the State Funding Board’s consensus recommendation adopted by the second session of the 105^th General Assembly in May of 2008.

Kingsport, Tennessee City Manager, John Campbell gave an update on how the City of Kingsport is doing at the local Kiwanis Club meeting on January 16,2009. A Kingsport Times-News article discusses what he said and the newspaper did a follow-up poll. The results of the poll show that 61 percent do not share John Campbell’s upbeat outlook for the city.

The City of Kingsport, Tennessee officials and local business leaders should read what the Blount County and City of Alcoa, Tennessee response was on the layoffs at Alcoa, Inc.

This should be a wake up call to Kingsport, TN.  When you have a major employer and you get the major part of revenue, then you are setting yourself up for failure when that employer has a major hiccup.

Retail is fine, but what good is new retail business if the citizens have no money to spend.  Kingsport or Sullivan County needs to attract other industry to this area that offer good paying jobs.  Stop the obsession with getting the sales tax dollars from retail.  Invest in the future!

Officials ‘in shock’ as Alcoa announces layoff of 450

Local officials were devastated by today’s news.

“It’s going to have a heavy impact on everything across the county,” Blount County Mayor Jerry Cunningham said.

He blamed the layoffs on both high utility rates charged by TVA and reduced demand in the aluminum market. He said the layoffs have “a ripple effect. It affects sales tax collections” and is “terrible news, particularly the impact on 450 families.”

Mark Johnson, the Alcoa city manager, said, “It’s unprecedented in history. It reflects how bad the economic times are. This represents about a third of the work force over there.” While it’s difficult to gauge any specific dollar impact on the city, he said, “people are not going to spend as much money, which will reflect negatively on sales tax (collections).”

The aluminum company buys “a considerable amount of water” from the city of Alcoa. “Water is a big-ticket item,” Johnson said, so city revenues could be affected on that front as well.  Read the full story on Alcoa at Knoxville News Sentinel

The City of Kingsport, Tennessee, with its spending of taxpayers money, fails to see what is  happening to the struggling families who are trying to keep their heads above water in the economic crisis we are in.

Unemployment in Kingsport is the highest in the Tri-Cities area.

People are having to rely on food stamps to feed their families in record numbers.  See the quote from the Bristol Herald Courier article below.

More than 13 percent of Sullivan County residents received help from the U.S. government’s Supplemental Nutrition Assistance Program in October, a month that broke program participation records across the state of Tennessee.  Click for more Record Numbers Seek Aid To Buy Groceries

Because of what is happening in the economy, retirees that are drawing on a percentage basis from their 401k’s have less to live on now.  Also, retirees that draw a fixed amount from their 401k’s have had to readjust the amount withdrawn downward for fear of running out of money in their 401k.  I am sure there are people thinking about retirement, but have postponed it because of the economy.

Tennessee state revenues continue to slide and are down 7 percent for the recent month.  Tennessee may face a $1 billion shortfall.  The Tennessean newspaper reports the following in the article below.

State’s decline among worst in U.S.

Bill Fox, director of the Center for Business & Economic Research at the University of Tennessee, said Tennessee has one of the nation’s largest declines in revenue, topped only by Florida and Arizona, a finding that surprised him. While Tennessee has not fared poorly with sales taxes, its slowdown in corporate tax collection is among the country’s worst, he said.

“Tennessee is feeling the brunt of the economic downturn from the tax revenue perspective much worse than is the norm around the U.S., at least through this part of the fiscal year,” he said.

States, Counties, and Cities around the country are being forced to cut spending, laying off workers and reducing pay for workers.  But, in Kingsport, it is business as usual with a bigger government with a bigger budget for this fiscal year and more city employees.  Kingsport debt is over $191 million and still growing to which Kingsport can be better known as the “TAX, BORROW, and SPEND” city.

Eastman Chemical has announced that their 4th quarter earning will widely miss its projection.  What next for Eastman?   Will there be another layoff or will employees cut back on spending because of unknowns in their future?

What can the citizens of Kingsport do about the situation with the current administration in Kingsport’s City government?

You must become more vocal with the Board of Mayor and Alderman.  Write letters to the editor and spread the word to others about what is happening with city government.  Submit comments online at the end of articles in the local newspapers.  If the Kingsport Times-News won’t publish your response, then go to other newspapers in the area.  Make your friends aware of what is happing on the BMA.  Be active in the local elections for the four BMA members whose terms expire.  Help get new BMA members get elected that resemble your views and vote current BMA members out if they should decide to run again for office if their views do not match yours.

As for me personally, I will be doing the following;

I will not vote for Mayor Phillips, Vice Mayor Mallicote, and Alderman Joh in the upcoming election if they decide to run for office again.  Reason:  Big spenders of taxpayers money.

Nothing seems to get the attention of certain BMA members (Phillips, Mallicote, Joh, Munsey, and Shupe) when citizens express concerns over spending or other issues.  Hence, I will be doing the following below.

If I decide to sell my property, I will not do business with Blue Ridge Properties since that is Alderman Joh’s business.  I have used Blue Ridge Properties in the past and in my opinion, they did not do anything for me that other real estate firms couldn’t offer.

If I need legal work done, I will not use Vice Mayor Mallicote’s law firm.

If I die, I will not use the Oak Hill Memorial Park, Funerals and Cremations owned by Stewart Enterprises because of Alderman Shupe’s employment there as manager.  I will not buy products from Shupe Securtiy since it is an Alderman Shupe firm.

I will not do business with any firm associated with Mayor Phillips or Alderman Munsey.  This means also that if Mayor Phillips opens up another Pizza joint, I will not buy his product.

Since gas prices are lower, I will shop elsewhere in Johnson City or Virginia and use the internet.

But, I will use Alderman Pat Shull’s business (Mary’s Kitchen) or any business Alderman Marsh has.

Maybe, in my small part, I can begin to get their attention when it affects their wallets.

Now, if everyone did the above, it might get Mayor Phillips’ attention.  But I’m sure he and other big spender BMA members will use some of the same threats below that has been used in the past.  Mr. Mayor, you do not need to reduce the services, instead reduce your obsession with the pet project spending you have done during your almost two terms.

Famous Quotes from the Kingsport Board of Mayor and Alderman

Mayor Dennis Phillips – ‘We need MeadowView to keep from reduceng fire, police protection, and reducing trash pick-up to every two weeks.” October 21, 2008

Mayor Dennis Phillips –“We need to annex so we don’t have to raise taxes”  February 5, 2008

Alderman Munsey – “We need to do the MeadowView expansion to keep from raising taxes” September 15, 2008

Alderman Munsey – Debt is neither good or bad,”   June 3, 2008

Vice Mayor Mallicote – “I do not believe all of the doom and gloom about the economy”.  June 3, 2008

Mayor Dennis Phillips – “If the taxpayers wanted the city to cut the spending, then we could collect garbage every other week”  June 3, 2008

Mayor Dennis Phillips – “If there were no money to spend, then you would not need politicians”  October, 2007

Mayor Dennis Phillips refuses to give back the regional sales tax to the citizens after it has served it’s purpose.  The Federal government has help out all kinds of firms and has given money back to the taxpayers.  It is time for Kingsport to step up to the plate and help the citizens out.  How about it Mayor Phillips?

Wake up Kingsport!!