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Trustee and finance director clash over property tax forecast as commissioners begin budget review
Summary
Shelby County trustee and finance officials disputed the appropriate property tax collection forecast to use in the FY2026 budget. Trustee said a 98% forecast is unrealistic and risks a budget shortfall; finance staff defended using higher forecasts and accounting accrual practices.
Shelby County’s elected trustee and county finance leaders offered sharply different views of property-tax forecasts during a Budget & Finance Committee discussion on the fiscal 2026 proposed budget.
Michael Thompson, deputy chief financial officer, reviewed multiyear trustee reports that show the trustee’s office collected slightly more than forecast in several recent years and said those historical excess collections supported the administration’s FY26 projections. Director of Administration and Finance Audrey Tipton and Deputy CFO Thompson explained that governmental accounting permits accruing July collections that relate to the prior fiscal year, which increases the usable revenue base for year-end reporting.
The county trustee, identified in the meeting as Virginia Newman, strongly disputed the administration’s proposed 98% collection forecast for realty and personal property in FY26, saying the county operates on cash and that projecting collections at 98% "is a fantasy" that could leave the county with an estimated $9.5 million shortfall. Newman said the trustee’s historical collection rate is 97% and cautioned that forecasts should not use different Julys to produce an apparent revenue increase. She urged fiscal prudence and warned the commission that overambitious forecasts create budget risk.
Finance staff said they used trend analysis and past over-collections to inform the FY26 forecast and reiterated that accrual accounting permits recognizing additional July receipts that relate to the prior fiscal year. They described the trustee’s collection work positively — noting multiple years of excess collections — and stressed that the administration’s proposed budget factors both revenue and expenditure estimates (personnel and O&M) to reach a balanced plan.
Commissioners asked clarifying questions about collections and urged continued one-on-one consultations with finance staff; no vote was held and the matter was to be discussed further in subcommittee before full-commission action on budget items.
