published Sunday, May 20th, 2012

Cleveland-Bradley County alliance hit by sales tax dispute

  • photo
    Gary Farlow, CEO of the Cleveland Bradley County Chamber of Commerce
    Photo by John Rawlston /Chattanooga Times Free Press.

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CLEVELAND, Tenn. -- Officials say an ongoing sales tax dispute between Bradley County and Cleveland could put future partnerships between the two governments at risk.

On Monday, Bradley commissioners are expected to vote on a resolution declaring that the county won't be able to participate in joint capital projects with the city "due to a potential loss of sales tax revenues."

"This dispute has an effect on a lot of stuff, period," commission Chairman Louie Alford said. "We need to mend our fences."

Potentially $2 million in annual sales revenue could be at stake, and "no one's budget can take a hit like that," Alford said.

Cleveland City Councilman Richard Banks recently cited the development of a new industrial park, upgrades to Interstate 75's Exit 20, the public library and the Museum Center at Five Points as examples of jointly funded programs that could suffer if the county withholds funding.

Economic officials also have expressed concern.

"Local government cooperation is an important part of being able to serve this community," said Gary Farlow, president of the Cleveland/Bradley Chamber of Commerce.

The chamber's board of directors adopted a position in April 2011 on the matter, Farlow said, urging the city and county to work together "in a respectful and cooperative spirit."

Last Monday, the City Council voted 4-3 against Banks' proposal to end the city's litigation regarding a 1967 tax-sharing agreements between the two governments.

The measure was supported by Councilmen Dale Hughes and George Poe. Councilmen Bill Estes, Avery Johnson, David May and Charlie McKenzie opposed it.

The 45-year old agreement -- amended in 1972 and 1982 -- splits sales tax revenues according to formulas driven by city and county student populations and whether the revenue was generated inside or outside the city. The current conflict arose over sale tax initiatives passed by the county and city in 2009.

Two weeks ago the Bradley County Commission announced a resolution to step back from future funding in partnership with the city, but postponed a vote until their counterparts addressed Banks' proposal to end litigation.

Several commissioners supported the resolution, saying the measure was not simply a strategy intended to pressure the City Council into backing down. Many said the county just could not afford to take such a financial loss and also continue to fund projects with the city.

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