published Thursday, April 17th, 2014

Bradley County Schools moves to collect liquor taxes

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 Cleveland owes the county school system.

A joint statement this week by Johnny McDaniel, director of Bradley County Schools, and Vicki Beaty, board chairwoman, said that a complaint for a declaratory judgment had been filed by attorney James Logan on behalf of the school system.

“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,” the joint statement said. “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,” Councilman Richard Banks said 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 further.

At that time, several members of the body expressed hope that another municipality and school system in Tennessee would serve as a test case for disputed liquor tax revenue distributions and settle the matter for Cleveland and Bradley County Schools without either having to take its own legal action.

Such a delay could 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, the Bradley County Schools’ announcement said.

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, Gary Hayes, a consultant with the County Technical Assistance Service, has said.

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,” McDaniel and Beaty said in the joint statement.

Bradley County Schools offered to dismiss the complaint immediately if the City Council will comply with the law.

Banks repeatedly has challenged the state code’s application to Cleveland since it operates its own school system, citing other text within the code that mentions municipalities that operate school systems separately from counties.

Paul Leach is based in Cleveland. Contact him at paul.leach.press@gmail.com.

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