NEWPORT-The Newport Board of Mayor and Aldermen approvedThe 2008-09 Budget Tuesday evening with no tax increase. The city tax rate willremain at $2.04 per $100 assessed value.

      According to abudget summary sent to council by City Administrator Scott Collins, "TheFY 2008-2009 Budget draft being presented at this time reflects a deficit of$333,307. After consultation with Department Supervisors regarding line items,additional cuts totaling $88,000 will be made prior to the Final Reading of thebudget, leaving the budget deficit at $249,307." The option chosen bycouncil to address the $249,307 deficit is as follows.

      "Balancethe FY 2008-2009 Budget by using $249,307 of the current fund balance.According to Brown, Jake & McDaniel, PC, (Newport's auditing firm) the fundbalance as of April 30, 2008 is $1,859,456.19. That figure reflects our"high water" mark and will decline throughout the year until propertytax collections start in November.

"Although relying on the fund balance to balance acurrent year budget is not a recommended practice, it is believed that it wouldbe practical for FY 2008-2009, due to special circumstances. In the FY2008-2009 Budget, there is a one-time expenditure in the amount of $213,631 forRetirement Bonus Pay. This expenditure is not a reoccurring expense. Actually,in future budget years, the one-time retirement incentive will pay dividends inlowering salary expenses and other related personnel costs.

"Another contention in proposing to use funds fromthe fund balance is the potential for additional economic growth. Bojangles hasalready opened for business and Tennessee State Bank will open soon. As aresult, both properties will bring an increase in property tax revenue andBojangles will add to the sales/business tax base. Additional proposals includethe site plan submittal for a Holiday Inn Express adjacent to the Waffle Houseand plans under consideration for a restaurant on Highway 25/70 next to ComfortInn."