Sales tax pact disagreement clouds talk of consolidation

Sales tax pact disagreement clouds talk of consolidation

April 18th, 2011 by Cliff Hightower and Dan Whisenhunt in News

Ending a decades-old pact to fund vital programs jointly is a funny way for Chattanooga to pursue consolidation with the county, Hamilton County Mayor Jim Coppinger says.

Chattanooga Mayor Ron Littlefield has pushed since 2009 for the city and county to look at ways of consolidating some services. Just over a week ago, he sent a letter to the county, seeking to start creating a charter study commission for consolidation.

But Coppinger said long-standing arrangements related to the public library system, the health department and the planning agency will be torn apart by the city's insistence on the lapse of a 45-year-old sales-tax agreement that details how the city and county jointly fund those agencies. If the sales-tax agreement dies, it would be a setback for consolidation talks, he said.

The tax agreement gives the county control of about $10 million in sales taxes collected in its cities to help support agencies that provide a variety of services. The agreement expires in May, and the money reverts to city control.

Coppinger said he's especially disappointed that the city is willing to put the Chattanooga-Hamilton County Health Department at risk with the loss of the sales-tax agreement.

"I'm disappointed we're going to take that step backwards and disband something that was already consolidated," Coppinger said. "You have to wonder about the seriousness [of consolidation efforts] when you start disbanding things that are already consolidated."

Littlefield said the dissolution of the sales-tax agreement is a natural step as the city and county start educating themselves on who pays for what.

"We need to have a communitywide discussion about services and who is paying for them," he said.

Littlefield has said consolidating services would help both governments be more efficient and economical. He said the debate would be put to rest if the county would agree to establish a citizens panel to do a charter study on consolidation.

There's a range of opinion on the subject on the City Council and County Commission. A majority of City Council members would like to see the talks on consolidation go forward. County commissioners have been more ambivalent, with some saying they would favor it if services aren't diminished and it saves money.

County Commission Chairman Larry Henry said the city is trying to use the sales-tax agreement to push consolidation talks. Letting the agreement expire "is not going to make me any more inclined toward consolidation," he said.

Council Chairwoman Pam Ladd said she doesn't think there is a grand strategy linking consolidation and the sales-tax agreement.

"It [the agreement] would have ended even if there were some parties interested in metro government," she said.

The sales-tax agreement does bring another "sticking point" to talks about consolidation, she said. The city maintains its residents are being double-taxed in some areas of the agreement and unfairly paying more than their fair share in others.

Commissioner Jim Fields said Littlefield is the only city official he's heard who links consolidation with the sales-tax agreement. The City Council - which voted Tuesday to let the agreement lapse - believes letting the agreement expire is the right thing, he said.

"They can only do what's in the best interest of their constituents, and in their minds, I'm sure that's what they think they're doing," Fields said.

Councilman Jack Benson said the end of the agreement puts more responsibility on the county to pay for services covered under state law. He said he does not think the disagreements will bleed over into possible consolidation talks.

Instead, he said, as council members, commissioners and the public are educated on how the taxes are divvied, it will solidify the need to look at consolidation.

"I think it removes some barriers instead of building barriers," he said.