If a sales tax agreement with the city of Chattanooga is not renewed, Hamilton County Mayor Jim Coppinger says, the Chattanooga-Hamilton County Health Department could lose $10 million, roughly half its budget.
It's a deep enough cut to effectively disable the health department, said Rebekah Barnes, the department's administrator. The department's budget is $21 million and it employs 320 people, she said.
"I think that kind of cut would cripple your health department, and any and every thing that we do would be in jeopardy," she said.
Coppinger described the health department's predicament Wednesday during an hourlong forum about the 45-year-old sales tax agreement. Chattanooga Mayor Ron Littlefield, City Council Chairman Manny Rico and Commission Chairman Larry Henry also participated. The forum was sponsored by WRCB-Channel 3 and the Chattanooga Times Free Press.
The sales-tax agreement was established in 1966 as a revenue-sharing agreement between the city, county and other existing municipalities. The agreement laid out a plan to fund the school system as well as several nonprofit and quasi-governmental agencies such as the Chattanooga Hamilton County Bicentennial Library, the Regional Planning Agency and Allied Arts.
Coppinger said the $4.5 million the health department gets under the agreement is used as matching funds for about $5.5 million in grants. If the local money goes away, so does the grant revenue, according to Coppinger and County Administrator of Finance Louis Wright.
"If we start downsizing the size of the health department, we'll not be eligible for those grants," Coppinger said during the forum.
Littlefield has said repeatedly that he wants the sales-tax agreement to expire and to draft a new agreement that would be more in line with the way the city and county now operate.
Littlefield said that, as a countywide entity, the health department should be considered a "county responsibility" and funded from county coffers.
"We don't mind paying for all the library and they pay for all of the health department," Littlefield said. "It's a sorting out."
He emphasized that, even if the agreement expires, the same amount of money as before will be available for funded agencies, but it will be controlled by the city.
Coppinger and Henry both said they would be reluctant to tap the county's $85.7 million reserve fund for the health department. They have said spending from the reserve could hurt the county's AAA bond rating, which affects how much interest the county pays when it issues bonds.
At the County Commission meeting Wednesday, Henry said commissioners will vote on a resolution at their first April meeting in favor of renewing the agreement. Henry called on Rico and the City Council to pass a similar resolution.
After the forum, Littlefield said such a resolution would be "a waste of time."
He also said the city would not look for a public relations or education firm to explain the structure and effect of the sales tax agreement to the public, an idea floated a few weeks ago by City Councilwoman Deborah Scott. No company submitted proposals after the city put out a bid a month ago, he said.
"We don't really need a public relations firm," he said. "We're beyond that."
Representatives with Derryberry Public Relations and Waterhouse Public Relations said Wednesday they did not feel the timing was appropriate for a PR company to step into the sales-tax issue.
"We didn't feel like it was the right thing to do," said Robin Derryberry, owner of Derryberry Public Relations. "There are times when elected officials need to talk to their constituents and each other and this is one of those times."