Question 1

Where does municipal finance data come from?

Accepted Answer

Municipal finance data comes from the Tennessee Comptroller of the Treasury, which collects and publishes annual financial reports (CAFRs and AUDs) for every Tennessee city. The Comptroller's Division of Local Government Audit oversees compliance with the Annual Audit Law.

Question 2

What are the main revenue sources for a municipality?

Accepted Answer

Most Tennessee cities rely on local option sales tax (typically 2.25-2.75% on top of the 7% state rate, shared with schools), property taxes, business tax (state-shared), state-shared revenues (gas/sales tax), franchise and excise taxes, and charges for services. Tennessee has no state income tax (the Hall tax on bond/dividend income was fully repealed in 2021), making local option sales tax especially important.

Question 3

What is a General Fund and why does it matter?

Accepted Answer

The General Fund is the municipality's primary operating fund. It covers core services like police, fire, public works, and administration. A healthy General Fund balance (typically 25-50% of annual expenditures) indicates the town can handle unexpected expenses without raising taxes or cutting services.

Question 4

How current is this financial data?

Accepted Answer

TN Comptroller data typically lags 6-18 months behind the current fiscal year (which ends June 30 for most Tennessee cities). The most recent year with complete audited data is usually one to two fiscal years prior.

Covington, TN

Covington Municipal Budget

Finances — FY 2022