School board association raises concerns over cities' liquor back-tax bill

School board association raises concerns over cities' liquor back-tax bill

April 14th, 2014 by Andy Sher in Local - Breaking News

Liquor served in Chattanooga.

Liquor served in Chattanooga.

Photo by Dan Henry /Times Free Press.

NASHVILLE -- A top Tennessee School Board Association official said today the group has reservations about a bill seeking to address many cities' failure to pay liquor taxes to local education agencies for years.

"We're not necessarily saying any or all of it [bill] is awful right now," said Lee Harrell, the association's government relations director. "It needs to be vetted more than [simply] look at this the next 24 hours."

Harrell noted the state Legislature is expected to finish its annual session this week and a number of questions have been raised.

State Comptroller Justin Wilson's office is using the bill to provide resolution and structure to an issue that is resulting in Chattanooga alone being on the hook for an estimated $11.7 million.

Last week the Hamilton County Department of Education sued Chattanooga with officials worried the bill might force them into a solution they felt wasn't in their interest.

Harrell said under a proposed amendment, the bill says cities would not back held responsible for back taxes prior to July 1, 1999.

"A lot of cities are sitting back and saying, 'Let's wait to see what passes. We might not owe as much money as we think we do,'" Harrell said. "Obviously school systems are concerned about that. If they have documentation dating back to before 1999, they're afraid their revenues are going to be limited."

He cited a Jackson Sun news account where Jackson Mayor Jerry Gist was quoted saying the city could save $1.1 million on its $3.3 million debt if the amendment was adopted.

Another provision give cities ten years to pay the money without interest.

Hamilton County officials said they filed suit against Chattanooga fearing the would-be law would restrict them.