published Wednesday, May 9th, 2012

Bradley County: Tax flap threatens future ventures

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    Bradley County Commissioner Ed Elkins
    Photo by Gillian Bolsover

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CLEVELAND, Tenn. — Bradley County commissioners say the county can't afford to lose more revenues in a sales tax dispute with Cleveland and still participate in joint capital projects with the city.

County commissioners voiced support late Monday -- but withheld a vote -- for a resolution that states the county will be unable to join the city in any major projects "due to a potential loss of sales tax revenues."

"The facts are that without some of that sales tax revenue, we -- the County Commission -- do not have the money to participate in some projects we would otherwise participate in," Commissioner Ed Elkins said.

The rift between the county and city involves a 1967 agreement between the two on the division of sales tax.

At stake is nearly $900,000 a year, according to previous statements by City Manager Janice Casteel.

According to the agreement, local schools get half the sales tax revenue with the county receiving a two-thirds share based on student populations. However, the county only receives one-third of the other half of sales tax revenue because most sales are made within the city.

After a Chancery Court ruling upheld the 1967 agreement when it was challenged by the city, the Cleveland City Council voted 4-3 to take the case to the Tennessee Court of Appeals.

Two weeks ago, Councilmen Richard Banks and George Poe asked that the city reconsider the appeal to salvage relations with the county. The Cleveland City Council agreed to review the matter at its next meeting Monday.

Bradley County commissioners agreed to postpone a vote on the resolution, stating they wanted to see whether the city will continue the litigation.

A vote on the resolution before that could be perceived as a simple matter of "tit for tat," Commissioner Jeff Yarber said.

County commissioners said their support of the resolution was not a matter of spite or posturing, but of economics.

"This is reality for us," Commissioner Adam Lowe said. "This isn't politics, this isn't gaming, it isn't betting."

The purpose of the resolution, which originated with a recommendation from the Bradley County Finance Committee, was not to serve as a strategy to force the city's hand, Elkins said.

"The intent of the resolution is just to put the City Council on notice that we're strapped," he said.

Paul Leach is based in Cleveland. Email him at paul.leach.press@gmail.com.

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