In case you are all atwitter about recent discussions of the city-county sales tax agreement; I just waded through a file on the history of the agreement. It is big enough to choke a mule.
Here’s the way it looks to me: Chattanooga Mayor Ralph Kelley and Hamilton County Judge Chester Frost started correspondence about the need for an agreement to split the sales tax revenue so the two governments could support those agencies serving both city and county citizens. A good example is the library.
Though wary of each other, the two governments crafted a sales tax agreement in 1967. It wasn’t a big victory for either side, but from the start, some city and county elected officials didn’t hide their displeasure with the plan.
The city has always been sensitive about “double taxation.” Double taxation came about automatically when the city of Chattanooga was formed. The county is an arm and agency of the state and would have had to provide all services if the city hadn’t wanted some “extra” things like a fire department, better police protection, schools and a whole host of services required by an urban society. The quickest way to provide the extra services was to set up a city, and they did and this added another level of taxes (double taxation). Surprise, surprise.
There was so much uncertainty about the fairness of the tax agreement that both governments asked UTC to do a study in the 1970s. The agreement was not even a decade old, but both sides wanted to double check and see if it was fair. There was a huge crowd there the night the university released its study. If anyone was happy with the report, no one showed it. The university staff said the tax agreement was fair to both governments. Still wary of one another, the elected officials of both governments kept murmuring about the agreement.