published Friday, April 11th, 2014

Hamilton County school board files suit seeking nearly $12 million from Chattanooga

The entrance to the offices of the Hamilton County Department of Education headquarters.
The entrance to the offices of the Hamilton County Department of Education headquarters.
Photo by John Rawlston.

The Hamilton County school board has filed a lawsuit in Chancery Court seeking nearly $12 million in past due liquor taxes from the city of Chattanooga, school board Chairman Mike Evatt said.

The board voted 8-1 on March 21 to sue over the ongoing issue. But board attorney Scott Bennett held off filing suit after the two sides appeared to be in talks over the issue.

The suit was filed today, as pending legislation in Nashville could change the dynamic in the city-schools feud.

School officials say they are owed $11.7 million in liquor-by-the-drink taxes that went unpaid between 1998 and 2012 — a span of three mayoral administrations. Mayor Andy Berke was made aware of the issue before taking office in April 2013 and his administration sought to work out a deal with the school system, using pieces of property and some cash to repay the debt.

But no deal was ever officially approved. And since taking office, records show, Berke's team has withheld more than a half-million dollars from its payments as it worked to find an alternative to paying the full bill. For months, the two agencies were at a standstill. But in the days after Board of Education members voted to sue the city, the two sides sought to reconvene talks.

School leaders were bolstered by a Feb. 26 opinion from Tennessee's attorney general that said school boards can't waive any past-due liquor taxes. Attorney General Robert Cooper said there is no statute of limitations on the fees, and municipalities can't offset the costs with local-option sales tax revenue. But, Cooper wrote, municipalities don't have to pay it back all at once — they may agree on a payment plan.

about Kevin Hardy...

Kevin rejoined the Times Free Press in August 2011 as the Southeast Tennessee K-12 education reporter. He worked as an intern in 2009, covering the communities of Signal Mountain, Red Bank, Collegedale and Lookout Mountain, Tenn. A native Kansan, Kevin graduated with bachelor's degrees in journalism and sociology from the University of Kansas. After graduating, he worked as an education reporter in Hutchinson, Kan., for a year before coming back to Chattanooga. Honors include a ...

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