Johnson City’s Board of Education adopted a resolution Tuesday requesting that a March 2012 public referendum be held to let voters decide whether they want to dig a little deeper to help fund local schools by increasing the local sales tax by one-quarter cent.
The resolution, which passed in a 5-1 vote, now will be presented to the City Commission, which must approve placing the referendum on the ballot in early March when Republicans hold their presidential primary.
BOE Secretary Sheila Cox voted against the move; board member Lottie Ryans was not present.
“I support education, but I just cannot support this,” Cox said. “People are hurting all over, and I just don’t think it’s the right time. I just can’t do it. I just can’t.”
The resolution is simply worded. It asks the City Commission to approve a referendum on the stated amount. Should the referendum be held and the measure pass, the entire increase in revenue would be used for the sole purpose of funding K-12 education.
Though the Washington County Commission has, for now, tabled the idea, a joint board comprised of members from the Washington County and Johnson City boards of education recommended the referendum.
BOE Chairwoman Kathy Hall introduced the resolution and said that residents and visitors alike would bear the burden of the tax increase.
“Voters decide,” she said. “The money has to come from somewhere. The economy is still struggling, and this is a difficult issue. There certainly is an anti-tax movement in this country, and we’ve run into that. But we can, as a city, move on without the county.”
The last sales tax hike in Washington County was approved in May 1994, when city and county school officials joined in a push for passage of a county-wide referendum. That successful campaign raised the local options sales tax from 2.25 percent to the current 2.50 percent. The referendum’s margin of victory was 1,512 votes with nearly 12,000 votes cast.
Further attempts in 2000 and 2004 were heartily thumped by more than 2-1 margins.
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.
A major point discussed at a May meeting between the two school boards was the possibility of the state increasing the sales tax rate and keeping the revenue. If the state opted to raise the rate before it was raised locally, the revenue from that increase would go to the state.
Of all sales tax collected in Washington County, 50 percent is earmarked for education. Of that 50 percent, the amount is distributed to the city and county school systems according to average daily attendance. Currently, 45.07 percent of this money goes to city schools and 54.93 percent goes to county schools.
“The most important thing in this resolution is that we are giving taxpayers the opportunity to pass this or not,” said BOE Vice Chairman Richard Manahan.
Director of Schools Richard Bales is now tasked with addressing city commissioners and requesting that they approve the referendum.
“Mr. Bales will notify City Manager Pete Peterson, and this will get placed on the upcoming agenda or one soon after,” said Commissioner Ralph Van Brocklin, who attended Monday’s meeting. “The question now is whether the county will piggyback on this. We’ll see what they decide to do.”
Van Brocklin said he will vote for the referendum.
The local option sales tax was authorized by the Tennessee General Assembly in 1963 and became immediately popular as a source of revenue for local governments. In 1969, the tax was authorized in 78 counties. By 2002, all 95 counties had a local option sales tax at rates ranging from 1.5 percent to 2.75 percent.