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Hamilton County Commissioners vote on a new Wal-Mart in Hixson.

 

A new grocery store in Hixson will be a boon to Hamilton County's coffers, but it may be a hit to the city of Chattanooga's purse.

County commissioners on Wednesday approved a much-debated zoning change that will allow retail giant Wal-Mart to open a 41,000-square-foot grocery store at the corner of Thrasher Pike and Middle Valley Road.

Critics of the store say the store won't create new revenue from the area, it will only siphon sales tax from the municipalities.

By the company's own estimates, the new store will bring $500,000 more in sales tax to the unincorporated county.

But that's because 96 percent of residents who live in the area currently shop at stores in nearby municipalities such as Chattanooga or Lakesite, according Matt Phillips, vice president of real estate for Hutton Company, the developer.

The county will get 2.25 percent of each dollar spent in the store.

Half of that money will go to county schools -- which is true no matter where sales taxes are collected in the county. But the other $250,000 will go straight into the county general fund.

Sales in the city of Chattanooga generate the city's 2.25 percent rate (with the same 1.125 percent going to the county's schools). But then the city gets an additional portion from the state based on population.

Tennessee Department of Revenue spokeswoman Kelly Cortesi said cities split 4.603 percent of 5.5 percent of the total 7 percent state cut.

It's a only a slice of a slice of the state's sales tax -- but it's still a pretty big pie.

In this fiscal year, the city raised $39.7 million in local sales tax and received another $11.9 million from the state. Next year, it projects to pick up $39.8 million in local tax and $12.3 million from the state, according to city records.

Chattanooga Chief Operating Officer Brent Goldberg said it's hard to say if or how the city's budget projects could be affected by potential sales tax loss in the Hixson area.

"We can't accurately project sales tax revenue from a particular retail location, especially with no historical trends," Goldberg said.

County spokesman Mike Dunne said the possible boost to revenue from the store is not slated for any particular purpose.

"The money will go to the general fund. It will help defray expenses. Things will be more expensive next year than they were this year, and this will help cover the cost," Dunne said.

Contact staff writer Louie Brogdon at lbrogdon@timesfreepress.com, @glbrogdoniv on Twitter or at 423-757-6481.

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