Past mistakes, future threat pose need for tax

By Ed Howell
Posted 8/10/17

Well, the sales tax vote is next Tuesday. I need to speak to you quite seriously ...

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Past mistakes, future threat pose need for tax

Posted

Well, the sales tax vote is next Tuesday. I need to speak to you quite seriously ...

When I was called down in my second hour on the job to cover the Walker County Commission dealing with budget problems, it was really a continuation of coverage that I dealt with when I was first at covering the Walker County Commission at the Daily Mountain Eagle. I didn’t come to the beat immediately, but when I did I came to discover the problem with the 2002 bond issue. In January 2005, John Archibald devoted a whole column in the Birmingham News to the Walker County debt, as the Alabama Department of Examiners of Public Accounts came out with an audit the month before.

“In September 2003, for the third time in two years, Walker County commissioners issued bonds that will put future generations in a financial pit, if not bankruptcy,” Archibald wrote. He quoted Mike Scroggins, head of county audits for the Examiners office, saying, “This is worse than any tax that could ever be put on those people. Unless something really changes, they are going to be in real trouble.”

By January and February 2005, we had headlines such as, “A growing debt (subhead: “County borrowed to make jail payment),” “County jail budget three times higher after ‘98 move,” and “County looking at budget cutbacks.” The middle headline refers to the annual jail budget jumping from $800,000 to $2.5 million after the court-ordered jail was built to relieve overcrowding.

It was noted in one story that a $21 million bond issue was taken out in 1998 for the jail, and that led to a 2003 issue costing $1.2 million when it had trouble paying a scheduled $635,000 increase in payments. That is what led to the state auditors and Archibald having a stroke, noting that payments for some of these bonds were postponed so some of them would not start until 2018.

Some of the commission ran in 2012 on dealing with the debt. I’ve gone back in the archives, and I will vouch that soon after the 2012 commission was seated, it refinanced the bonds saving some money, and they started making cuts to savings. However, eventually the principal on that refinanced issue still had to come due.

It comes due next year, in the new budget that takes effect Oct. 1 this year. We need to pay $1.5 million a year for about the next 15 years.

We don’t have it, and as a result we are staring at a $1.4 million deficit for the coming fiscal year. And that is why Walker County voters will go to the polls Tuesday to determine the fate of a 1-cent sales tax increase that is set to raise $7 million, as well as eliminate the $10 car and boat tag that helped build the jail. They have decided to use the opportunity to address other needs that are needing funding, including economic development, fire departments, public safety (particularly courthouse security) and most of all $4 million needed for roads and bridges. It is all dedicated, every penny, to good needs, and declining funding has been a problem for some of them, particularly gas tax revenue for roads.

But in the priorities that are set in the enabling legislation, which will go into effect with a positive vote, put paying off the debt first. Forget the other needs for a moment. The debt is numero uno, the big Doomsday to Come. And if the tax is not passed, Doomsday will come.

I have talked with the commissioners and listened to them when the public was out of the room. Trust me, they mean business. If the tax is not passed, we’re going to have bankruptcy. It will be far worse for the community at large than the individual (and real) pain of paying extra in a sales tax. We will have major government layoffs and cutbacks in services. We will have longer lines to get tags and other services, and offices closed some days. Forget the county coming to help municipal roads; they will grind asphalt roads into dirt to save maintenance funds. They have already discussed the preliminary plans and they are waiting to go into effect. Discretionary funds that go to various organizations would be cut quickly.

And when all that happens, you can kiss economic development goodbye. You thought the peanut butter deal got state press? Wait until the Birmingham TV stations and al.com come swooping in their $1,000 suits, telling about how poor ol’ bumpkin Walker County, which can’t even keep 12 prisoners from escaping, will now be forced to take bankruptcy because they can’t pay for their bond issue — and that they once even borrowed to make a payment on the issue.

At that point, we might as well replace “Welcome to Jasper” and “Entering Walker County” signs with, “Welcome to Dogpatch.” They’ll be surprised some of us still are wearing shoes, because they will find anyone who looks like proper Dogpatch citizens (preferably with no teeth or command of the English language, as nice and smart as those people probably are in real life) to interview. “Poor ol’ Walker County! Maybe our church should set up a food drive for those people ...”

You think industry and retail are going to keep coming here? I know of one retail that was expected to be announced by now, but no they are hesitating. I can imagine what they are hesitating for. They are hesitating to see if we are all on Food Stamps by the end of the month. In other words, even if we find another way out, the perception and image will stick harder than peanut butter to the roof of your sheriff’s mouth. We will always be stuck with the image, added to Bishop’s punch and the exploding lawnmower.

Sonny Brasfield, the executive director of the Association of County Commissions of Alabama, said a few months ago, “Greene County has never overcome it. They are not the same, and I am not sure the county will ever overcome that in full measure,” he said. “The county is really still mired where they were when they filed for bankruptcy. “Jefferson County has bounced back better, but I think the folks there would tell you they struggle greatly.”

As for potential bankruptcy in Walker County, “I would say that from where I sit in Montgomery, everybody in Walker County ought to be willing to do whatever they have to do to avoid that,” he said. And I could tell over the phone he meant it. And Jerry Bishop, chairman of the local commission, notes even if the county declares bankruptcy, governments don’t get out of paying the bill. They still have to pay it — only the courts start getting involved.

Yes, and recall it was the courts that ordered the details for the large jail that got us into this fix to begin with. You want them involved again?

Now, I know you are angry. Where have you been? I’ve been angry. I was angry in 2005, and I am angry today. And certainly, I don’t want to pay the extra cent. I’m not rich, and I was even poorer just a few months ago. I know it doesn’t help on budgets.

And you can’t throw the commissioners out of office, because they are all gone and it is a whole new set of commissioners. Two of the commissioners have been tackling the problem for coming up on five years, and three of the five were elected last year.

If you want to go after the current commissioners for what they did in the last term, or if you want to say they should have use a property tax, or they should have allocated the money better, well, you have a chance in 2020. Frankly, voting in protest against the tax will only lead to worse repercussions. Lack of home rule through the Legislature doesn’t allow us to quickly go to a Plan B, like property tax. This is it.

Many of you have told me lately that you think I tell the truth and I’m fair. I appreciate that, and I try to. I am now using that political capital and using it to tell you the truth: We are stuck. Our leaders have made mistakes, and if we vote down this tax (which we probably should have passed years ago), we are headed for economic disaster. If you don’t believe them any other time, this time I assure you they are speaking the truth.

I want to protest, too, but we have no choice. We can comfort ourselves that the money is allocated, and, frankly, we can use this opportunity to catch up on our roads. But we have to pass this. Defeating the tax might get rid of some excess expenditure here and there, but bankruptcy would swat a fly with an atomic bomb and cause more harm than good.

I hate the reason. I detest the tax. But I strongly, urgently recommend you pass this tax, because we have to climb ourselves out of this well without creating an atomic crater that destroys this county’s economic future. I will blame the past, but maybe we can learn our lesson and never have to go this route again.