Bradley County offers deal on sales tax

Bradley County offers deal on sales tax

March 22nd, 2011 by Randall Higgins in News

Staff Photos by Randall Higgins/Chattanooga Times Free Press Cleveland School Board members visit the Cleveland High School Science Wing in this file photo.

Staff Photos by Randall Higgins/Chattanooga Times Free Press Cleveland...

CLEVELAND, Tenn. - The Bradley County Commission is offering a compromise to the Cleveland City Council on how to share more than $689,000 in disputed sales tax revenue.

In separate 2009 referendums, city and county voters approved a 50 cent increase in local sales tax collections. The county says that extra revenue should be shared under an existing formula. The city says this is new revenue and not subject to the formula.

The county sued the city for a portion of the money. The dispute could be resolved in Chancery Court in April.

The county offer is to put the money into a joint account, from which litigation costs would be deducted and the rest used for future capital projects, beginning perhaps with a new industrial park.

Some commissioners urged caution in the wording to avoid a commitment to an industrial park at a specific location for now.

"There are two ways this resolution can be done,'' said Commissioner Jeff Yarber, who made the proposal. "We can put the city's feet to the fire and say this money will be used to establish an industrial park. Or we can strike that portion and say we have this money and then begin a debate on what this money will be used for."

A decades-old contract between the city and county calls for the first half of local sales tax collections to be used only for schools, based on student population. That means the county gets two-thirds and the city gets one-third of that half. The second 50 percent of total sales tax collections is split in reverse, with the city getting the two-thirds share.

But city officials have said the original sales tax increase two years ago was sold to city voters as money to be used only for capital projects, including paving, sidewalks and school construction. Part of Cleveland High School's science wing was funded from that 50 cent increase.

"The County Commission, not the Chamber of Commerce, should make decisions about the industrial park," Commissioner Terry Caywood said.

The commission's vote to make the offer was approved 11 to 2, with Commissioners Ed Elkins and Mel Griffith voting no. One commissioner was absent.

Contact Randall Higgins at or 423-314-1029.