Franklin debt is out of hand

Published 12:00 am Thursday, April 17, 2008

To the Editor:

We, the undersigned citizens of the City of Franklin, have had a keen interest in the city finances and how they were handled by many city councils for a number of years.

Recognizing there were unmet needs such as infrastructure and savings plans for future school needs in 1987, the city had no long-term debt and

just a small amount of short-term obligations.

From 1987 until 1996 previous administrations had incurred more than $10 million debt to correct some major problems. Since that time the indebtedness has increased to more than $23 million after construction of elaborate government buildings and questionable projects.

We neither hear nor see any serious concern about this enormous debt, except that the city cannot afford a new school until probably 2023. When you are paying more than a million dollars for interest yearly, it is hard to decrease the indebtedness very rapidly.

In all of this great period of prosperity, we have followed the same scenario as our federal legislators and administrators whose philosophy is spend more, borrow more and tax more. No wonder the Chinese are now bailing us out by buying U.S. government bonds.

The average sales price of housing in the city dropped from $189,000 in 2006 to $154,000 at the end of 2007, or roughly 18.5 percent.

If the assessment for 2008-09 drops proportionally, the city tax base will be reduced by $7.4 million, which presents a real problem when the base goes from approximately $400 million to around $393 million. This means the tax revenue drops from $36 million to $35.37 million.

As of the above date, there were 125 houses on Multiple Listing Service for sale in the city, some for more than a year, in addition to those for sale by owner.

The city budget for 2007-08 was approximately $50 million and is expected to increase for next year. There are four ways to make up this shortfall. First, increase taxes; second, use the 2006 tax assessment (but this is illegal since we have to use the 2008 assessment, according to Virginia statutes); third, raise all present fees; and fourth, eliminate specific high-level jobs while cutting salaries.

Oh, another possibility exists: “borrow.”

To complicate matters, the state legislature has cut the lottery proceeds to Franklin schools $250,000 for the next school year and is granting teacher salary increases of 2 percent for the next biennium. Therefore, the teachers get no raise next year and 2 percent the following year, unless the city can provide more funding.

In addition, the state has increased the sales tax to 6 cents on the dollar, while cutting aid to localities 4.2 percent. There is no telling where the hammer will drop next, but citizens of Franklin must be made aware of all the problems that we will be facing in the future.

There is one way that the citizens of Franklin might be able to change this scenario and that is to change the makeup of

our City Council. We need people who are professionals in the field of finance who have run or advised people on how to succeed in business.

At the next election we have a great opportunity to make this happen.

We encourage you to go to the polls and cast your vote for Benny Burgess in Ward 2 and Barry Cheatham in Ward 1.

B. Barham Dodson

Joe H. Stutts

William H. Riddick

E. B. Gatten Jr.

Wesley F. Wills

Dale J. Parsons

Rowland B. Vaughan Jr.

Everett C. Williams

Robert T. Edwards