Sales tax accord ends; new era begins

An era that began 45 years ago has ended.

The sales tax agreement crafted in 1966 as a way to fund jointly agencies that help both city and county residents expired today.

And 10 agencies ranging from a children’s home to a mental health center have learned that Chattanooga will not grant their funding requests for the new fiscal year that starts July 1.

The largest funding cut — $421,000 — is to the Children’s Home/Chambliss Shelter

Executive Director Phil Acord , said Friday his agency is caught in the middle of a political “tug-of-war” between the city and the county.

“I feel like we’re kind of being used as a bargaining chip,” he said.

Acord said he cares less about the end of the sales tax agreement and more about trying to make his budget next year.

City Mayor Ron Littlefield said the sales tax agreement had “outlived its usefulness.”

The agreement shifted sales tax money collected in the city to county coffers to help fund agencies that served both city and county residents. The end of the agreement means the city will regain control of about $10 million when the new fiscal year starts.

Littlefield said Hamilton County officials need to realize their duties extend to the entire county, not just the unincorporated areas.

“It will force the county to see their role more as an urban government rather than a rural government,” he said.

But County Mayor Jim Coppinger said last week he does not see the end of the agreement as a milestone, but rather a large bump in the road for the county budget.

He said no one should be shocked when the county cuts back on services and employees.

“Unfortunately that time has arrived,” he said.

Littlefield said last week that because the county is going to start charging the city a fee to collect city sales tax, it should use the fee to fund services for the 10 agencies.

A 2 percent fee on estimated city sales tax of $37 million would bring in $735,000. The funding requests total $1.3 million.

But Coppinger said funding for those 10 agencies is a city problem.

“They [the city] told them they had nothing to worry about when the sales tax agreement went away, and we all heard that on a number of occasions,” Coppinger said. “That’s not our issue. That’s between them and the agencies.”

Councilwoman Carol Berz, chairwoman of the council’s Budget and Finance Committee, said the city had budgeted for the agencies before it learned that the county was planning to charge a fee to collect city sales taxes.

“If that money goes back to the county, the county should fund those agencies,” she said.

But she said she understood the agencies’ concerns.

“It puts these agencies in a hard situation, almost like a pingpong ball,” she said.

Sandra Hollett, chief executive officer for the Partnership for Families, Children & Adults, said her organization requested $56,522 to help pay for the rape crisis center and a functional family therapy program that helps target gang members.

She said her organization, too, is caught in the middle of an argument.

“I would really be concerned if our leaders were using rape crisis for political gains,” she said.