County’s first AAA bond rating comes in 2021
Rutherford County Commission boosts public safety pay by at least 8%
Rutherford County Commission Chairman Jeff Phillips talks about decision to boost public safety pay by at least 8%.
- Many county leaders contributed to county’s financial reputation
- County borrows for better interest rates with AAA ratings
- Mayor Carr seeks balanced budgets
- Mayoral candidate Harris also praises AAA bond ratings
- Forensic Center project financing contributed to AAA rating
Rutherford County government earning a third AAA bond rating for financing has followed many tax hikes, including a 16% increase in 2023.
The added revenues from the tax increases have helped fund new schools, government buildings and raises for Rutherford’s public workforce to keep pace with inflation and rapid growth.
Property tax hikes also can show that the government will be responsible with debt and raise needed revenues to ensure bond investors will be paid back with interest, county finance professionals say.
The strong bond rating pleased County Commissioner Robert Peay Jr.
“It has been my goal for our county to get the AAA bond rating since I became budget chairman (in 2018),” Peay said.
“These three ratings are the result of our county’s financial stability and the policies we have adopted over many years. We have the lowest tax rate of all the five largest counties in Tennessee and the least debt except for Hamilton County’s, which is slightly lower.”
Rutherford’s property tax rate lower than most neighboring counties
Rutherford County’s property tax rate is $1.8762 per $100 of assessed value following the commission’s decision for a 16% increase in 2023 to balance a budget with a $64 million deficit.
The median value of owner-occupied homes in Rutherford County from 2019 to 2023 was $346,400, according to U.S. Census Bureau estimates. The owner of a home with that median value pays an annual property tax bill of about $1,625 for government and public education services.
Rutherford’s property tax rate, according to Tennessee Comptroller Office most recent online records for 2024, is less than Shelby County’s $3.39 for Memphis area; Davidson County’s $2.922 for Nashville area; and Hamilton County’s $2.2373 for Chattanooga area. Rutherford’s rate, however, is higher than Knox County’s $1.554 for Knoxville area.
The Rutherford rate is also lower than the comptroller’s 2024 listed rates for neighboring Bedford County of $2.3252; Coffee County’s rate of 2.331; Willson County’s rate of $1.9089; and Williamson County’s rate of $1.88.
Rutherford’s property tax rate is higher than Cannon County’s rate of $1.596 and Marshall County’s rate of $1.8187, according to the 2024 comptroller’s report.
Many county leaders contributed to county’s financial reputation
Peay praised the work of former county government Finance Directors Paul Long and Lisa Nolen and current Finance Director Michael Smith in helping the government attain the AAA status, including the recent one from S&P Global Ratings.
“I also want to recognize our former budget chairman Bob Bullen, Jimmy Evans, Joyce Ealy and Will Jordan,” Peay said.
“Our county has prospered under their leadership and the county commissioners who have helped us maintain our policies that have made this possible.”
Peay has joined others county officials to advocate for the government to maintain ample money in fund balance reserves, which provides rainy-day money that can help with emergency costs, such responding to tornadoes, floods and other natural disasters. Reserves also ensure the government can cover payroll while awaiting property tax revenues to be paid starting in October.
County borrows for better interest rates with AAA ratings
County government spokeswoman Lisa Kaye announced the news about the third AAA bond rating in a press release July 1.
The press release included comments from Smith, the county finance director. He succeeded Nolen, who was finance director when the county initially won an AAA bond rating in 2021.
“This process started several years ago when we received our first AAA rating from Moody’s,” Smith said.
“We have continued our commitment to strong financial policies and now have the strongest rating possible from all three major credit rating agencies. This is a testament to our county’s commitment to work together and keep conservative fiscal management policies in place over time, even through tough economic circumstances. This will allow us to obtain lower borrowing rates, saving taxpayer money.“
The first AAA bond rating came while former Republican Mayor Bill Ketron was serving. Ketron and former Mayors Ernest Burgess, a Republican, and Nancy Allen, a Democrat, all made budget recommendations the past 25 years that contributed to county commission-approved property tax increases ranging from 3.8% in fiscal year 2006-07 under Allen to 16% in 2023 in the first year for Republican Mayor Joe Carr.
Mayor Carr seeks balanced budgets
Mayor Carr recommended a commission-approved 16% property tax hike in 2023 to eliminate a $64 million budget deficit at the start of his term after winning his seat August 2022.
“Ever since being elected mayor, I have made sure that the county (government) has had a balanced budget, through a strong conservative approach of not overspending,” Carr said in the press release.
“This shows the hard work and dedication of not only the mayor’s office, but also the hard work of the (government) department heads holding firm on their individual budgets,” Carr said. “This is just another example of how we have been getting it right in Rutherford County.”
Although the mayor touts balanced budgeting, Carr recently proposed a commission-approved $2.8 million deficit to this fiscal year’s main government budget of $189 million in response to county commissioners seeking raises for employees, including up to 9.75% increase for public safety workers.
Mayoral candidate also praises AAA bond ratings
Carr in the press release also noted that Rutherford increased to being Tennessee’s fourth most populated county and ahead of Hamilton in the Chattanooga area.
If Carr seeks campaigns for another term as mayor in 2026, he’ll face competition from elected County Commissioner Craig Harris, who supported the mayor’s recommendation for the 16% property tax hike.
Harris texted the following comments to The Daily News Journal about the third AAA bond raiting for the county.
“The AAA rating is a testament to the work started years ago,” said Harris, who serves on the commission’s Budget, Finance and Investment Committee led by chairman Peay.
“This rating cannot be achieved in two to three years. It’s a collection of time, but it is also a testament of Lisa Nolen, Michael Smith, (elected Trustee) Teb Batey, the budget committee, Mayor Burgess, Mayor Ketron and county commissioners.”
Harris suggested the county earning a strong financial reputation is far more than a crafting a budget.
“It is a financial strategy and planning over time,:” Harris said.
“I am proud of the success of the finance director we have now and in the past. I have always believed in a conservative approach when it comes to the financial stability of our county, and that is exactly what our leaders have accomplished. Rutherford County shouid be proud of this achievement.”
Forensic Center project financing contributed to AAA rating
The press release included the following comments from S&P Global Ratings:
“The ‘AAA’ rating reflects the county’s rapidly growing economy in the Nashville metro region, along with its extremely strong finances with robust reserves and taxing flexibility, prudent fiscal management, and manageable debt and liability profile, especially when considering that most of the debt is for the county’s school department, which benefits from having additional revenue flexibility.”
The S&P Global Ratings for Rutherford also factored in the $15 million one-time transfer to fund building a forensic center on Weakley Lane in north Smyrna, according to the press release.
“We expect that strong economic growth and proactive financial management will continue to yield positive financial results, and that revenue growth will keep pace with increased service needs,” the S&P Global Ratings stated in the press release.
Reach reporter Scott Broden with news tips or questions by emailing him at sbroden@dnj.com. To support his work with The Daily News Journal, sign up for a digital subscription.
