published Monday, April 18th, 2011

Sales tax pact disagreement clouds talk of consolidation

by Cliff Hightower

by Dan Whisenhunt

Ending a decades-old pact to fund vital programs jointly is a funny way for Chattanooga to pursue consolidation with the county, Hamilton County Mayor Jim Coppinger says.

Chattanooga Mayor Ron Littlefield has pushed since 2009 for the city and county to look at ways of consolidating some services. Just over a week ago, he sent a letter to the county, seeking to start creating a charter study commission for consolidation.

But Coppinger said long-standing arrangements related to the public library system, the health department and the planning agency will be torn apart by the city’s insistence on the lapse of a 45-year-old sales-tax agreement that details how the city and county jointly fund those agencies. If the sales-tax agreement dies, it would be a setback for consolidation talks, he said.

The tax agreement gives the county control of about $10 million in sales taxes collected in its cities to help support agencies that provide a variety of services. The agreement expires in May, and the money reverts to city control.

Coppinger said he’s especially disappointed that the city is willing to put the Chattanooga-Hamilton County Health Department at risk with the loss of the sales-tax agreement.

“I’m disappointed we’re going to take that step backwards and disband something that was already consolidated,” Coppinger said. “You have to wonder about the seriousness [of consolidation efforts] when you start disbanding things that are already consolidated.”

Littlefield said the dissolution of the sales-tax agreement is a natural step as the city and county start educating themselves on who pays for what.

“We need to have a communitywide discussion about services and who is paying for them,” he said.

Littlefield has said consolidating services would help both governments be more efficient and economical. He said the debate would be put to rest if the county would agree to establish a citizens panel to do a charter study on consolidation.

There’s a range of opinion on the subject on the City Council and County Commission. A majority of City Council members would like to see the talks on consolidation go forward. County commissioners have been more ambivalent, with some saying they would favor it if services aren’t diminished and it saves money.

County Commission Chairman Larry Henry said the city is trying to use the sales-tax agreement to push consolidation talks. Letting the agreement expire “is not going to make me any more inclined toward consolidation,” he said.

Council Chairwoman Pam Ladd said she doesn’t think there is a grand strategy linking consolidation and the sales-tax agreement.

“It [the agreement] would have ended even if there were some parties interested in metro government,” she said.

The sales-tax agreement does bring another “sticking point” to talks about consolidation, she said. The city maintains its residents are being double-taxed in some areas of the agreement and unfairly paying more than their fair share in others.

Commissioner Jim Fields said Littlefield is the only city official he’s heard who links consolidation with the sales-tax agreement. The City Council — which voted Tuesday to let the agreement lapse — believes letting the agreement expire is the right thing, he said.

“They can only do what’s in the best interest of their constituents, and in their minds, I’m sure that’s what they think they’re doing,” Fields said.

Councilman Jack Benson said the end of the agreement puts more responsibility on the county to pay for services covered under state law. He said he does not think the disagreements will bleed over into possible consolidation talks.

Instead, he said, as council members, commissioners and the public are educated on how the taxes are divvied, it will solidify the need to look at consolidation.

“I think it removes some barriers instead of building barriers,” he said.

about Dan Whisenhunt...

Dan Whisenhunt covers Hamilton County government for the Times Free Press. A native of Mobile, Ala., Dan earned a degree in broadcast journalism from the University of Alabama. He won first place for best in-depth news coverage in the 2010 Alabama Press Association contest; the FOI-First Amendment Award in the 2007 Alabama Press Association contest; first place for best public service story in the Alabama AP Managing Editors contest in 2009 for economic coverage; and ...

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MasterChefLen said...

It seems like the only person that keeps bringing up the idea of metro governement and supporting it is Mayor Littlefield. He is probably thinking that if it went through, he could run for metro mayor. Fat chance of that, he couldn't get elected dog catcher after this second term. Any private employer that would hire him is a fool. Let's see if he is able to cut a sweetheart deal with a company in exchange for employement after his term.

April 18, 2011 at 11:55 a.m.
joeguy44 said...

I would like for the city or the TFP to explain this article quote indepth...

The city maintains its residents are being double-taxed in some areas of the agreement and unfairly paying more than their fair share in others.

The claims are unfounded and wrong based on the reporting I have read. Since the agreement that the city let expire is based on sales tax, there is no foundation for the concept of double taxation. Sales tax based revenue is a tough form of funding. Consumers can control how much they spend and contribute to that tax pool. More importantly though, the people of the city — attention voters— should ask the council, "what are you going to do with the kept revenue?" Since they are not sharing it, and they claim that you are being double taxed, why are they keeping the taxes? There has been no discussion of lowering taxes. The big point here is they are keeping the money and still taxing us while removing the services we got with those taxes. According to the city we get the same double taxes, but now with less service.

Currently we have an health department that worked well as a county-city funded group, an example of consolidation and a potential study point for future efforts. The city has chosen to break that group up by removing their portion of the funding. If the idea of a metro government has any merit, this is an error in judgement. The process of "metro" consolidation will take years to happen. In the wake of such a change potentially 100s of highly trained health professional will lose their jobs and the community will be less prepared for health emergencies. It is a known fact in business that hiring a new employee is considerable more expensive than training a current one. Crushing a service sector of our community and in the long run potentially hiring those positions back will cost millions of dollars to even start the process. If those new hires have to be re-certified, we can tack on plenty of more money. The smart move would be to work out an adjusted sales tax share for the now ending tax agreement while the feasibility study of a single metro government is examined.

I think this whole process is another example of executive level elected officials failing to work out tough problems for which they are highly compensated to do. As voters in our community we should make sure that they do what is in the best interest of our health and safety. Keeping the taxes which they say are unfair and removing our services is a failure to govern adeptly.

April 18, 2011 at 12:27 p.m.
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