TN County Government Spending Exceeds Revenue

Many Tennessee counties have been spending more money than they take in as revenue, according to a new report from the state comptroller’s office.
An excerpt from the report (full text HERE):
Total revenues for all Tennessee county governments totaled approximately $11.65 billion for the fiscal year ending June 30, 2011. In contrast, total expenditures for the same period were approximately $12.14 billion. Therefore, counties spent approximately $490 million more than they received in general and operating revenues.
County governments have seen sluggish growth in revenues over the last five years, as expenditures have exceeded revenues in each year over this time period. The slow growth includes years in which counties received federal money from the 2009 American Recovery and Reinvestment Act. This trend indicates that either debt was increasing during the
same time period, or fund balances were decreasing, or both.
Total county-related debt in Tennessee increased almost $1.41 billion from 2007 to 2011. This indicates that many county governments are deferring debt prinicipal payments and other obligations to future years. Audits conducted or reveiwed for the fi scal year ended June 30, 2011, disclosed fund defi cits totaling $110.29 million in governmental funds in 14 counties. Audits also refl ected net asset defi cits totaling $83.24 million in enterprise and internal service funds in 14 counties.
Tennessee counties have avoided the bankruptcy crisis seen elsewhere around the nation as a result of the economic
downturn. Although bankruptcies have been avoided to date, concerns remain. Along with the substantial increase in long-term debt, liabilities continue to grow for other post-employment benefi ts, such as health insurance premiums, awarded to government employees after those employees leave public service. In addition, new accounting standards will require the recognition of signifi cant long-term pension costs. These costs, which previously have not been recorded on the fi nancial statements when they were incurred, will dramatically impact large and small governments alike.

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