JACKSON Tenn (June 23, 2017) – The Madison County budget committee met on Thursday to discuss new tax options.
In May the city council voted to rescind its resolution sending one-half of a 1989 special local purpose tax to the county. The resolution earmarked the dollars for public education. The county filed a petition for an emergency injunction asking the court to freeze all disbursement of tax dollars as is before the vote takes effect July 1.
On Tuesday Chancellor James Butler denied the county’s petition for an emergency injunction. However, the judge did order the two bodies to participate in mediation although no timetable was set. The judge also indicated he felt the county had a good chance of being successful with at least one of the several arguments they presented as they attempted to prove the city was in violation of an agreement.
On Thursday the county budget committee discussed possible taxation options. Right now they are considering a combination of a $75 dollar wheel tax and a .42 cent property tax increase. The county is looking to replace the estimated $12 million tax dollars the city is now keeping.
However, there are other options that would not include a certain and imminent tax increase on residents.
There are tax options such as a “hamburger tax” which is levied on prepared food served in the county. Such a tax would dilute the total burden from being only on local residents. Commuters and travelers who purchase prepared food would help fund the tax.
Another option is finding budget cuts, and short-term loan to bridge the gap until either a resolution is reached in mediation or a judge has ruled on the lawsuit.
If the county raises or implements new taxes before mediation or a court decision and is successful then they will be faced with either keeping the new revenue and rescinding the new tax. If the county keeps the tax, city residents paying the tax could also incur additional city tax increases.
The city will keep its share of the local purpose taxes collected for now but if the county wins its lawsuit the money will have to be refunded.
Either way right now what is on the table are potentially long-term decisions for a short-term problem.
County officials have said they have only days to approve a budget but state law does allow them to operate on a continuation budget until at least August 31.
Commissioner Gerry Neese said, “It’s time to talk…time for the two sides to talk and stop this senseless disagreement.”
The county budget committee will meet again on Tuesday.
Keith Sherley
TWITTER: @keithsherley
FACEBOOK: Afternoon Show with Keith Sherley
EMAIL: keith@wnws.com
