NEWPORT-"We have a lot of options and none of them are good," said Finance Committee Chairman Norman Smith during Thursday's meeting to try and finalize Cocke County's 2008-09 fiscal year budget.

"You either have to raise taxes, cut people or try to work with what we have," said Smith.

What the county currently has is a budget that shows a general-purpose fund balance of just more than $290,000. The budget, however, doesn't account for a shortfall in the Highway Department Budget, has nothing to keep the Cocke County School System from eating into its transportation budget fund balance and includes no raises for county employees.

"For the last few years, we've come out a little better than expected," said Finance Director Anne Williams. "But, as you know, we're going into a year where the economy is as bad as we've ever seen.

"I'm not trying to be unduly negative. But we budgeted the sales tax very flat this year. Who's to say I shouldn't have budgeted it in the negative?

"Also, the amount of gas tax revenue could be dropped because people are cutting back on the amount they drive and they're buying more fuel-efficient vehicles. I kept that projection flat, too."

Road Superintendent John Holloway said three cents for his department would be a "Band Aid" fix...not a solution.

"I don't want you to think our situation is because of mismanagement," said Holloway. "We've been running off our fund balance for the past three years."

Smith pointed out it will take three cents just to get the Highway Budget to $0. He added the schools also would need three cents to stop cutting into their transportation fund balance.

As for raises, Smith said a 2.5 percent raise for county employees would require another 3.5 cents.

"There no chance of getting that much out of the general fund," said committee member Henry "Skip" Gregory.

The current general-purpose fund balance for the county would only amount to about 6.5 cents.

Cocke County Mayor Iliff McMahan Jr. said the state recommends having at least $1 million in the general-purpose fund balance.

Williams said she had done calculations on what a tax increase might mean for the county and residents.

"Don't shoot me," she said. "I know the last thing you want is a tax increase. But I did some calculations just to let you know what it would mean."

Williams presented a scenario of what raising the tax rate from the current $2.48 to the pre-reappraisal rate of $2.70 would do.

"For a property assessed at $100,000, that tax bill would go up about $55 per year," she said. "That's about $1 week.

"That's not nearly as bad as the TVA increase on utilities or the rise in gasoline prices. I'm not saying don't be concerned about taxes. But, sometimes it's not as serious as other things."

Gregory said, "From the threats and promises made on this commission, it will not pass a tax increase. Even if it passed this committee, it likely wouldn't pass before the full CLB."

"People campaigned on a promise of no tax increases of any kind," added Smith.

Smith then inquired about raising the hotel/motel tax.

McMahan said the rate is capped right now but pointed out the county could raise the rate through a private act. He added, however, such an increase would not actually take effect until the next budget year.

 "We either have to raise taxes, which I'm against, or we have to go back over the budget," said committee member Scott McClure.

McMahan praised the committee for its efforts and pointed out members had already cut more than $100,000 out of the budget. He and committee members agreed they are very reluctant to cut jobs, especially considering the economy.

Some audience members questioned moving the schools to a 4-day week to save money.

Former Director of Schools Larry Blazer pointed out it is state law that students go to school 180 days each year.

The Finance Committee will meet again at 5:30 p.m. next Tuesday in the Courthouse Annex to try and finalize the budget.

In other business Thursday night, the Committee voted to give the Del Rio Volunteer Fire Department a one-time increase of $8,250 in its contribution. The department requested the money as matching funds for a FEMA grant that will allow the department to purchase a new $165,000 fire truck.

The Committee also approved an amendment for the retirement program for public safety employees. The program will require between $41,000 and $44,000 per year in funding but will not start until the next fiscal year. Derrick Woods of the Sheriff's Department pointed out that by allowing employees to retire earlier, the county will then see a savings because new employees can be hired at a lower rate.