City officials vote on sales tax details

Gary B. Gray • Jun 7, 2012 at 9:49 PM

The assumption was that the City Commission was ready to lock in its official public stance Thursday on the upcoming sales tax increase referendum.

That did eventually happen with two amendments and four total votes.

It just goes to show, one should never assume.

The original resolution stated that commissioners would pledge all proceeds that its general fund receives from the .25 percent increase in the Local Option Sales Tax solely for city educational purposes, including new construction, renovations, additions to facilities, debt service, facility maintenance and other city educational purposes in the sole and absolute discretion of commissioners.

Commissioner Ralph Van Brocklin asked that debt service be deleted as a use, and that the Johnson City Board of Education have a stronger voice in decision-making regarding where the money would be spent.

First, commissioners voted on the separate amended versions. The version deleting debt service failed in a 2-2 vote. Van Brocklin and Mayor Jeff Banyas voted yes; Vice Mayor Phil Carriger and Commissioner Clayton Stout voted no.

Commissioner Jane Myron, who left about midway through the meeting, would have been the deciding vote. She was not.

Next came a vote on the resolution with the caveat that school board members have a part in decision-making on education spending. Stout voted against the move, but the measure passed in a 3-1 vote.

Now we’re getting somewhere, right?

Back to the original proposal with the addition of board members getting a seat at the table.

Again, 2-2. This time Van Brocklin and Carriger voted in the affirmative and Stout and Banyas voted in opposition. Another failed vote. Commissioners looked at each other, befuddled at what had just happened.

About 15 minutes passed. Commissioners, who by this time had hit the coffee bucket a few times and exchanged words, decided to revisit the resolution — the one Van Brocklin originally suggested.

“This is going to make you happy,” Carriger told Van Brocklin.


Van Brocklin, a former school board member, smiled but also was a bit shocked.

“You can milk a cow many times, but you can only kill it once,” Banyas pronounced as the debate ensued before the final vote. “I hope we would put this in a maintenance fund.”

City Manager Pete Peterson warned commissioners that schools needed periodic repair and that having money in debt service was not that far fetched an idea.

Banyas said not making a provision for a maintenance fund was “a huge mistake.”

Carriger said he felt uncomfortable with the idea.

In the end, Van Brocklin’s suggestion somehow made sense to commissioners. And had he not made his move, commissioners would have — in writing — a resolution stating they and they alone would decide where education revenue would be spent.

On April 5, the City Commission unanimously voted to support the quarter-cent local option sales tax increase referendum, but it also agreed without dissent to reject Washington County’s request to sign an agreement to split part of the newfound money down the middle.

Since January, county officials have repeatedly asked that a portion of the revenues from the increase that normally is returned to the place of origin — currently about 85/15 with the majority going to the city — be shared equally instead and that the money go directly to city and county school systems.

City Manager Pete Peterson has consistently said he could not recommend the notion, because under the county’s proposal the city’s general fund would lose about $1.9 million.

County Mayor Dan Eldridge, who has openly displayed his disappointment with the actions and decisions of city leaders, said Thursday it’s up to the City Commission to decide what they want to do with their money. But from a taxpayers’ perspective, he said he is happy to see the city plans to dedicate the money raised from the sales tax increase to education.

“As a county mayor, I plan to continue to speak with them about their annexation strategy and the diminishing resources the county has to fund its schools,” he said. “They’ve set a course that’s negatively impacting our ability. It’s going to end up on county taxpayers’ shoulders, because they’re going to have to foot the bill. Their past decisions are already starting to impact us.”

The state collects all local sales tax proceeds. Half is returned to the city and county on a monthly basis. That split currently is roughly 55 percent and 45 percent, with the county receiving the larger share based on a slightly larger student head count. The other half goes back to where the tax revenue was generated, and that is where the city outshines the county.

Currently, the state keeps 7 percent of Washington County’s 9.5 percent sales tax rate. The local rate is 2.5 percent but would rise to a maximum 2.75 percent if increased, bringing the total sales tax rate to 9.75 — the maximum currently allowed by state law.

Commissioners also unanimously approved a first reading of an ordinance to amend sections of the zoning code to permit farm animals, including chickens, only in agriculturally zoned areas of the city. A second reading and public hearing is expected at the June 21 meeting.

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