Cleveland council to review tax ruling

Cleveland council to review tax ruling

November 11th, 2012 by Paul Leach in Local Regional News

Bill Estes of the Cleveland City Council

CLEVELAND, Tenn. - Bradley County commissioners have accepted an Oct. 30 appeals court ruling on dividing sales tax revenues with Cleveland, and on Tuesday the City Council will discuss the ruling.

"We will have an open discussion on Tuesday," Councilman Bill Estes said. "I have a few questions myself."

The Tennessee Court of Appeals upheld a prior Chancery Court decision on the legitimacy of sales tax revenue-sharing agreements between Bradley County and Cleveland that date back more than 40 years.

The ruling also expanded a Chancery Court ruling on another issue: the allocation of sales tax revenues after Cleveland and Bradley County separately passed sales tax increases in 2009.

"[Cleveland] shall be entitled to receive the proceeds of the 2009 tax increase on sales within the city limits from July 1, 2009, and through June 30, 2010," according to appeals court documents. The earlier Chancery Court decision limited the proceeds to the 2009 fiscal year.

The decision to appeal the Chancery Court decision split the Cleveland City Council earlier this year. Councilman Richard Banks, joined by Councilmen George Poe and Dale Hughes, attempted to head off a decision to bring the matter before the Tennessee Court of Appeals. Councilmen Avery Johnson, Estes, David May and Charlie McKenzie voted to move forward with the appeal.

In response to the ongoing litigation, the Bradley County Commission voted 13-3 that the county may withdraw from funding partnerships with the city "due to a possible loss of sales tax revenues."

That measure, passed in early June, was characterized as "a symbolic gesture" by Commissioner Mark Hall and as "a meaningless resolution" by Commissioner Jeff Morelock, who both opposed it.

The county's recent resolution to accept the appeals court ruling states the county has waived its right to a rehearing by the Tennessee Court of Appeals and seeks to discuss a financial settlement with the city.

Bradley commissioners expressed a desire to end the legal struggle with the city, passing the resolution in a 14-0 vote.

"An overwhelming resonation in this community is that this needs to stop," Bradley County Commissioner Adam Lowe said in a recent meeting. "We hear the voices of the folks in the city, we hear the voices of the folks in the county: this needs to stop."