The expiration on Monday of the 45-year-old city-county sales tax agreement has caused alarm among a number of vital civic and social services agencies that had been funded under the agreement. Many fear their budgets will be slashed because city and county officials have not agreed on an alternative funding plan.
To the extent that their fears are founded, however, that is the fault of county government, and county government alone. County leaders still refuse to acknowledge the countywide property tax base as the proper source of funding for countywide services.
The county’s big blindspot
County government’s core problem is that it has never acknowledged, or well served, its countywide obligations. With the exception of the county’s participation in developing the Enterprise South industrial park, county government has generally been content to act like its central governing function is to serve the unincorporated areas of the county. Never mind that 70 percent of county residents and most of the county’s businesses — all of which pay full county property taxes — are located in the county’s 10 municipalities; or, particularly, that fully half of the county’s residents and 80 percent of its businesses reside in Chattanooga.
The County Commission has relied, all too happily, on Chattanooga taxpayers to pay double taxes — first through their county property taxes, and then through their city property and sales taxes — for countywide services and civic agencies that serve the entire county’s population. One result is that city residents and businesses have been paying a highly disproportional 80 percent of the cost of countywide services.
A gross inequity
That inequitable formula has vastly benefited the county’s citizens who reside in unincorporated areas and thus escape municipal taxes for the city that provides their jobs, amenities and key services.
It also has benefited more lightly taxed citizens of other municipalities who have similarly escaped the double-taxation burden for countywide services that has fallen mainly on Chattanooga taxpayers in so-called city-county funding splits.
That arrangement had to end. Yet even with expiration of the sales tax agreement, the city is still assuming half of the funding it maintained under its $10.5 million gift to the county. It will now fully fund the Chattanooga-Hamilton County Bicentennial Library and the Regional Planning Agency, at a cost of more than $5 million.
County officials, regrettably, are now reluctant to step up to their legitimate responsibilities to assume adequate funding for the balance of the funding for the agencies now in limbo. Some are so myopic as to harbor resentment for their responsibilities for countywide funding for countywide services.
Newly selected County Mayor Jim Coppinger, unfortunately, has not had the spine, or broad vision, to assert the wise leadership on this issue that is now incumbent on his office. Indeed, he had the gall to say the other day that funding for 10 of the agencies is a city problem.
“They (the city) told them they had nothing to worry about when the sales agreement went away... That’s not our issue. That’s between them (the city) and the agencies.” Of course, he omitted the fact that the county — through the office of County Trustee Bill Hullander, a former county commissioner — now plans to charge the city a new 2 percent fee, of $735,000, to collect the city’s total sales taxes of $37 million. The fee, which amounts to half of the $1.3 million the city intended to give the agencies, is outrageous on its face: The collection is an electronic function — computed and remitted in seconds. The fee is a rather juvenile symbol of Coppinger’s wrongful anger over the dissolution of the sales tax pact.
No time for games
Coppinger — a former chief of the city’s fire department —should well understand the tax equity issues involved with the expiration of that agreement, as well as the growth and infrastructure issues that now confront county government and require bolder leadership.
It’s likely that his reluctance to lead on these issues arises from his desire to avoid a modest tax increase before the 2012 election. He obviously hopes in that election to win the second half of the term he now holds just temporarily on appointment to the office that Claude Ramsey resigned last fall.
If that’s the case, however, Coppinger yet doesn’t fathom the leadership level that is required for this contingency — and for other pending issues that he also is avoiding. One is adequate funding for the county school system. The other is providing a share of funding for the 10-county metro-area growth plan that is now being shopped for the city and county by the Chamber of Commerce.
If Coppinger seriously intends to be the sort of leader the county needs to tackle the wave of urban and infrastructure development that is looming outside the borders of Chattanooga in the wake of VW, Wacker and Amazon-related growth, he must act now. Countywide funding and growth planning — and a referendum to secure home rule or a county government charter — are urgently needed to handle infrastructure and regional growth issues, in addition to funding for the agencies previously funded under the city’s sales tax revenue.
County government, moreover, hasn’t had a tax increase since 2007, and that modest 26-cent increase went mainly for schools. That’s too big a gap to continue. Coppinger can’t put off the county’s civic, social service and infrastructure and planning needs and blame the city for the county’s failure to fund its own responsibilities. That’s not leadership. That’s an unvarnished, unconscionable dodge. It’s also a dubious platform on which to base his campaign for county mayor in the 2012 election.