Bradley County seeks lodging tax hike

CLEVELAND, Tenn. — A proposed increase to Bradley County’s lodging tax has cleared its first hurdle.

The Bradley County Commission voted 12-0 late Monday to ask that the Tennessee General Assembly amend the private act governing the county’s lodging tax rate and revenue distribution.

Commission Vice Chairman Jeff Yarber declined to vote, stating he wanted a better understanding of the proposal. Commissioner Bill Winters recused himself due to family ties to local hotel businesses.

The proposed changes call for increasing the current lodging tax rate from 5 percent to 7 percent and allocating 25 percent of collected revenues to education debt service, which has not received lodging tax revenues previously.

The measure was a product of compromise, said Commissioner Milan Blake, who sponsored the proposal.

“I wanted to put the best possible proposal together that we could do — one that we could pass and accomplish our objective,” he said.

The proposed reconfiguration of the county’s lodging tax is intended to create a revenue stream to fund debt service associated with a proposed makeover of Lake Forest Middle School, which calls for the construction of a central academic building that will replace nearly a dozen 40-year-old classroom pods.

Education debt service is projected to receive $300,000 annually as a result of the proposed tax changes, which were recommended by the Bradley County Finance Committee.

Annual debt service for the Lake Forest makeover is estimated to fall between $1.1 million and $1.3 million.

Bradley County has committed up to $12 million for the project in 2016-17, “as funds become available.”

However, the county also will have to borrow an additional $6 million when it funds the county school capital project, based on a longstanding agreement between Bradley County and the city of Cleveland that requires the county to raise $1 for the city school system for every $2 it raises for the county school system. The agreement is driven by the relevant student populations of the county and city school systems.

Only three commissioners — Thomas Crye, Mike Hughes and Johnny Mull — supported an alternate measure proposed by Commissioner Dan Rawls, who called for an 8 percent lodging tax rate and 28 percent allocation to education debt service.

Rawls’ proposal was projected to fund $380,000 annually for the Lake Forest project.

“I think 8 percent is a reasonable amount,” he said. “It puts us lower than Chattanooga.”

The impact of the requested increase goes beyond local hotels and could affect other local businesses, said Gary Farlow, president and CEO of the Cleveland/Bradley Chamber of Commerce.

While the requested tax increase amounts only to a few dollars a hotel room, it can make a big difference to corporate travel planners who sometimes book thousands of rooms for companies such as Life Care, Whirlpool and Wacker, Farlow said.

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