Jackson County Opinions...

JULY 10, 2002



Column
By Mark Beardsley
The Commerce News
July 10, 2002

MainStreet News
Just The Latest In
Financial Scandals
The Dow Jones Industrial average fell under 9,010 last week for the first time since 1998. Driving the decline, officials said, was the announcement by MainStreet News that it had falsely reported earnings for the last five quarters.
The revelation, made by an unsigned memo on the time clock at the company's Jefferson corporate complex, conceded that the company has been counting employees' private residences as company assets, a move which inflated the MSN value on Wall Street. In addition, it had fudged circulation numbers by counting papers used to line bird cages as paid circulation.
A recording at the Athens office of accounting firm Arthur Andersen stated, "We saw nuthinggggggg."
Following the accounting scandals at Enron, Xerox, WorldCom and the concession stand at Wrigley Field, the MSN revelation was more than Wall Street could handle. The only things falling faster than the DOW last Thursday were the bodies of stockbrokers whose clients' portfolios were loaded with MSN stock. Traffic was blocked for 45 minutes as rescue workers cleared the remains from the streets below and police arrested MSN staffers who were alternately photographing the gory scene and rifling the pockets of the victims for change.
The newest of what appears to be a long string of financial disasters drew sharp criticism from the White House.
"I say, dag nab it!" exclaimed President Bush. "How much did they give to the campaign? Money, I mean."
In Jefferson, speaking on the condition of anonymity, a Jackson County government spokesperson said the county government saw it coming.
"We knew the property, out of curiosity, was a matter of background information," he said. "Clearly, it should have been over-appraised for comparison and stated correctly among the corporate assets and topics of public conversation."
As a result of the crisis, MSN stock is no longer listed on the American Stock Exchange. For employees whose 401k retirement accounts consisted solely of company stock, it was particularly hard.
"I'd hoped to be able to retire at 80," said a Commerce News reporter/sanitary engineer. "Now I'm looking at 93, assuming the market rebounds."
MSN employees knew something was up when they found all of their homes listed in the "mobile homes for sale" section of the classified ads. When questioned, management said the listings were "just typos."
The news hit the print market hard. By Monday, copies of The Jackson Herald were selling for 22 cents, a decline of 56 percent. The Madison County Journal and Banks County News were selling at three and two cents respectively, while in Commerce, readers were demanding full refunds.
The SEC is investigating allegations that the awards reported last week by all four papers were fabricated. The Georgia Press Association is looking into charges that several news sources quoted regularly, including Harold Fletcher, chairman of the Jackson County Board of Commissioners, do not, in fact, exist at all.


Editorial
The Jackson Herald
July 10, 2002

Late test results useless
Once again, the educational bureaucracy at the state level has shown its own incompetence.
While the state mandates that local school systems administer two standardized tests in the spring, the results of those tests have not yet been compiled. That means the tests are basically useless to local school systems.
In theory, both the CRCT and Stanford 9 tests are supposed to help local school officials measure the success of classroom instruction. In addition, the tests are used to place students into special programs, such as gifted classes or special needs classes.
On the state level, standardized tests are supposed to raise the level of school accountability and some measures were put in place to punish schools that didn’t measure up.
But the test results won’t be released this year until after the start of school, meaning they will be useless and outdated by the time they arrive.
Already there is a growing backlash against standardized testing in public schools. Parents have become wary of the amount of classroom time being spent on “test prep” practices and on the immense amount of pressure the tests have begun to put on students and teachers.
Now we learn that basically, all that testing last spring was for naught. No school system can use the results for classroom placement or to make curriculum changes over the summer.
Maybe instead of reforming public education at the local level, we should focus on reforming the educrats in Atlanta who can’t figure out how to grade test papers.
What a waste of both time and money.

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Column
By Mike Buffington
The Jackson Herald
July 10, 2002

Pharaoh Fletcher wants tax hike
You may remember that last fall, Jackson County Board of Commissioners chairman Harold Fletcher was moaning about the county’s tax rate. Before leaving office in 2000, the Jerry Waddell administration lowered the county’s tax rate by five mills in a one-time rebate to taxpayers. The plan was to use some of the county’s excess cash reserves to subsidize the county’s 2001 spending.
That left Fletcher and company in the unenviable position of having to raise the rate back up to fund 2002 spending.
“That was a bad, bad decision — there’s no question about that. We inherited it,” Fletcher said of Waddell’s tax cut in September 2001.
Alas, the facts paint a very different picture of the county’s financial condition than what Fletcher would have us believe. The audit of 2001 for Jackson County shows that the tax cut was a good move not only for taxpayers, but also that it did not cripple the county government as Fletcher implies.
When the Waddell administration approved the tax rate cut in 2000, it was designed to consume some of the county’s excessive accumulated cash reserves. In fact, the budget for 2001 projected that the tax cut would consume $4.5 million in reserves.
But the audit for 2001 shows that the tax cut only consumed a little over $2 million in reserves, in part because overall income was up, but also because 2001 spending was down. In addition, at the end of 2001, the county still had millions of dollars in the bank, enough to go above the recommended level of cash reserves. Auditors recommend 15 to 25 percent in reserves — Jackson County had over 26 percent as of December 31, 2001.
So Fletcher’s claim that the tax cut was a bad decision doesn’t hold water. The truth is, he was attempting to make Waddell look bad. But for most of us taxpayers, a tax cut is never a bad thing.
There’s some indication that Fletcher isn’t through with the tax issue yet. Some sources report that he’s already laying groundwork to push for another tax rate hike this year, in large part to fund his ill-conceived courthouse proposal.
But one might wish to ask Fletcher about the county’s current spending. Although he termed the 2002 budget as “bare bones” when it was adopted by his board last year, the county has managed to find thousands of dollars to hire assistants for the county manager and thousands more dollars for new furniture in the county administrative building.
If that’s “bare bones,” I’d hate to see what a normal Fletcher budget would look like.
The truth is, the county budget has been growing faster than inflation or the demand for services. A few facts to consider: In the five years between 1997 and 2001, total county government spending (excluding the water authority, airport authority and health department) grew a whopping 79 percent, from $14.6 million to $26.1 million. At the same time, the county’s fund balance reserves grew 229 percent, from $2.1 million in 1997 to $6.9 million at the end of 2001. And in the four years between 1997 and 2000 just before the tax rate cut, the county’s income from real estate taxes grew 39 percent, from $4.6 million to $6.4 million. That’s almost 10 percent per year.
In a nutshell, Jackson County isn’t hurting and there is no valid reason for the BOC to hike property taxes again this fall. Whatever spending increase is needed should come from a growing tax digest, or from the reallocation of existing dollars into different priorities.
Of course, without a major tax hike, Fletcher won’t be able to build his courthouse.
Alas, the Sun Gods aren’t smiling on Pharaoh Fletcher — the slaves are revolting.
The proposed temple on Darnell Road to house His Highness’ ego may have to wait.
***

When the BOC voted last week to borrow $3 million against its anticipated tax income for 2003, there was a subtext action that has stirred some charges of ethics violations by a BOC member.
The board voted 3-0 to borrow the money from Regions Bank at a 2.45 percent adjustable rate. But one of those voting was commissioner Sammy Thomason, who is a director on the Regions Bank board.
It’s not unusual for local banking officials or board members to take part in the political arena, but they are generally circumspect about not participating in discussions or votes on banking issues where there could potentially be a conflict of interest.
Thomason may not think it was any big deal, and indeed whether he voted or not, the outcome would have been the same.
Still, with all the focus right now on ethics at the state level, and Thomason’s own high-profile as Fletcher’s waterboy on the Darnell Road property, one would have thought he might have been more attuned to staying arms-length from any deal where he had an interest.
The flak he gets now will be of his own making. He helped create a fight over the courthouse, then drew a bullseye on his chest by not following common sense ethics guidelines.
When the arrows begin to fly his way, as they surely will, he ought not to howl about it.
Mike Buffington is editor of The Jackson Herald.


Editorial
The Commerce News
July 10, 2002

Nicholson’s ‘Budget’
Designed To Deceive
Nicholson's city council passed its 2002-03 budget Monday, July 1, a $270,216 document purported to show the city's financial plan for the next 12 months. But if the city follows its historical pattern, the budget is a sham. Consider the following from the 2001-2002 budget.
•$16,666 budgeted but only $3,099 spent for building repairs and maintenance.
•$16,666 budgeted but only $2,424 spent on the repairs and maintenance of vehicles.
•$17,266 budgeted but only $2,792 spent on other repairs and maintenance.
•$2,000 budgeted but only $374 spent on library programs.
•$3,333 budgeted but nothing spent on capital outlay for buildings.
•$3,333 budgeted but only $979 spent on capital outlay for "infrastructure."
•$3,333 budgeted but nothing spent on capital outlay for machines.
•$3,333 budgeted but nothing spent on capital outlay for vehicles.
•$3,333 budgeted but nothing spent on capital outlay for computers.
•$3,333 budgeted but only $449 spent on capital outlay for equipment.
•$6,000 budgeted but nothing actually spent on the library.
In the above line items, Nicholson budgeted $78,600 and spent but $10,119. On its library alone, the city budgeted $8,000 but spent a miserly $374. Nicholson ended the year with $177,464 tucked away for no specified purpose.
By spreading thousands of dollars over several line items with the full knowledge that it has no intention whatsoever of spending the money, the Nicholson government is lying to its residents and taxpayers. Last year, the Nicholson city government told the citizens that it planned to spend $8,000 on its library. It spent a shameful $374. It’s making the exact same promise again, with the exact same intention and it is replicating the sham with nine other line items.
The document the Nicholson government calls a budget is not a budget. It’s a set of papers designed to fool people into thinking that the city has legitimate plans for the appropriation of public funds. Residents should storm City Hall and demand an explanation for the deception, for why the city government annually pretends it’s going to support its public library and then ignores it, for why it annually reports plans to make capital investments and then puts the money into long-term savings. Citizens should ask why the government feels compelled to so mislead its citizens about how public funds will be used.


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