The entrance to the offices of the Hamilton County Department of Education headquarters.
Chattanooga Mayor Andy Berke
Wade Hinton
Hamilton County school board attorney Scott BennettA Hamilton County Schools lawsuit demanding nearly $12 million from the city of Chattanooga in unpaid liquor taxes won’t be filed just yet, as the two sides have agreed to meet over the dispute.
School officials say they are owed more than $11 million in liquor-by-the-drink taxes that went unpaid between 1998 and 2012 — a span of three mayoral administrations. Mayor Andy Berke was made aware of the issue before taking office in April 2013 and his administration sought to work out a deal with the school system, using pieces of property and some cash to repay the debt.
But no deal was ever officially approved. And since taking office, records show, Berke’s team has withheld more than a half-million dollars from its payments as it worked to find an alternative to paying the full bill. For months, the two agencies were at a standstill. But in the days since Board of Education members voted to sue the city, Berke’s staff has sought to reconvene talks.
School leaders were bolstered by a Feb. 26 opinion from Tennessee’s attorney general that said school boards can’t waive any past-due liquor taxes. Attorney General Robert Cooper said there is no statute of limitations on the fees, and municipalities can’t offset the costs with local-option sales tax revenue. But, Cooper wrote, municipalities don’t have to pay it back all at once — they may agree on a payment plan.
The school board voted 8-1 on Thursday to sue the city for the $11.7 million it says is owed. Previously, Superintendent Rick Smith had sought to meet with Berke personally, but only made contact with his staff.