CLEVELAND, Tenn. — Bradley County Schools is moving forward with legal measures to secure a disputed $720,000 in previously distributed liquor tax revenues that it says is owed the county school system by Cleveland.
On Tuesday, a joint statement issued by Johnny McDaniel, director of Bradley County Schools, and Vicki Beaty, board chairwoman, said that a complaint for a declaratory judgment had been filed on Monday on behalf of the school system by attorney James Logan.
“We have attempted at every turn to work with the City of Cleveland to negotiate a resolution of the issues raised in our complaint for declaratory judgment,” said the joint statement. “We believe it is in the best interest of students in Bradley County to receive a portion of the Liquor Tax revenue.”
“I had just praised the Bradley County School Board during a recent City Council meeting for withholding legal action in light of a similar case that is testing the issue in Hamilton County,” said Councilman Richard Banks in response to the announced filing. “I’m disappointed that the citizens of Bradley County and Cleveland will incur additional legal fees to have a case to determine the issue.”
Bradley County Schools and the Cleveland leaders have been grappling with the issue since December.
In February, the City Council voted to wait 120 days before considering the issue any further.
At that time, several members of the body expressed hopes that another municipality and school system in Tennessee would serve as a test case regarding disputed liquor tax revenue distributions and settle the matter for Cleveland and Bradley County Schools without either having to take their own legal action.
Such a delay could possibly limit the recovery of disputed funds based on a number of current bills in the state Legislature that propose to change the distribution of liquor revenue proceeds, said the Bradley County Schools’ announcement.
The core factor driving similar disputes across the state is based on interpretations of Tennessee Code Annotated §574306, which governs the distribution of liquor tax collections, previously said Gary Hayes, a consultant with the County Technical Assistance Service.
According to the code, 50 percent of liquor proceeds allocated to the local government body should be “expended and distributed in the same manner as the county property tax for schools is expended and distributed.”
“We merely ask that the City of Cleveland follow the law as it is stated,” said McDaniel and Beaty in the joint statement.
Bradley County Schools offered to dismiss the complaint immediately if the City Council complies with the law.
Banks has repeatedly challenged the code’s application to Cleveland since it operates its own school system, citing other text within the state code that mentions municipalities that operate school systems separate from the county.
Paul Leach is based in Cleveland. Contact him at firstname.lastname@example.org.