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Sales Tax Agreement

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					    City Council
Sales Tax Agreement
     Budget Committee
       April 12, 2011
            Special Thanks

Ms. Daisy Madison, CFO

Finance Department - data

Citizen Education Advisory Group on Tax Equity:
          Dr. Richard Wilson
          Mrs. Helen Burns Sharp
          Mrs. Lynn Ashton
          Mr. Steve Fairley
1965
                                                                        2011
County asks city to temporarily
extend sales tax agreement
By Beverly A. Carroll

Published Thursday, March 31, 2011

Chattanooga Councilwoman Deborah Scott said she would "beg“ Hamilton County
Commission members to work with the city if it would help the bodies find
another way to replace the soon to expire sales tax agreement.
                                                                                        Scott Says City Not
"The fact we don't wish to renew this current agreement doesn't mean we don't want
to work on solving a funding problem for those agencies," Scott said to commissioners
Thursday morning. "But we prefer those allocations be more equitable.”
                                                                                        Threatening Cutoff Of Funds
                                                                                        For Any Agency Covered By
                                                                                        Sales Tax Pact
                                                                                        posted April 5, 2011

                                                                                        City Councilwoman Deborah Scott said Tuesday that the city "is not threatening
                                                                                        the demise of any agency" that has been receiving funding under the sales tax
                                                                                        agreement.

                                                                                        City Council members again showed no interest in renewing the pact that has
                                                                                        been in effect since 1966.

                                                                                        Ms. Scott said the council next Tuesday will discuss funding for agencies covered
                                                                                        under the sales tax agreement.

                                                                                        In prior years, the city has been sending about $10.5 million of sales tax funds
                                                                                        collected in the city to the county for distribution to the health department,
                                                                                        Regional Planning Agency, the library and others.
$10.6 Million

       2009
Sales Tax Total Under
      Agreement
    Agencies Funded from Agreement
•   Erlanger                    $1,500,000
•   County Health Department    $4,128,700
•   Fortwood Center             $92,300
•   Joe Johnson Mental Health   $26,974
•   Speech & Hearing Center     $68,865
•   Chambliss Children's Home   $227,701
•   Civil Defense               $861,204
•   Regional Planning Agency    $990,007
•   Scenic Cities Beautiful     $22,888
•   Public Library              $2,640,000
               Total            $10,558,669
      Agencies Funded from City General Funds

•   Fortwood
•   Regional Planning Agency
                                 $3,702,895 million
•   Scenic Cities Beautiful      City Funded in addition to the Sales Tax Agreement
•   Public Library



•   Children’s Advocacy Center
•   Senior Neighbors
•   Allied Arts
•   WTCI Public Television       $422,603
•   Urban League                 City Funded in addition to the Sales Tax Agreement
•   Regional History Museum
•   African American Museum
•   Bessie Smith Hall


                $4,125,498 from City Taxpayers
                   in addition to the Sales Tax Agreement
$14,684,167
Total Chattanooga Dollars
  spent on agencies from
 Sales Tax Agreement and
       City Tax dollars
Since Several Agencies are funded by
         a combination of:
  Chattanooga Sales Tax Dollars
              AND
 Chattanooga Property Tax Dollars
  Property Taxation is
    Pertinent
        to the
Sales Tax Agreement
Many Things are “MADE IN CHATTANOOGA “. . .




    58% of Hamilton
    County Property
        TAXES
Hamilton County Tax Dollars include
58% from Chattanooga properties
  Double Taxation is
    Pertinent
        to the
Sales Tax Agreement
            Chattanooga Based
            Support of Agencies
City’s Sales Tax                   $10.6 Million
City’s Property tax                $ 4.1 Million
City resident’s 58% County tax     $ 5.4 Million

                          Total   $ 20 Million
2009 Total Agency Funding
$20 Million Burden on Chattanooga
         and its taxpayers

 $3,950,582                   Inside
    16%                       Chattanooga




                              Outside
                              Chattanooga (all
                              OTHER cities &
              $20,070,812     unincorporated
                 84%          residents)
Hamilton County Commission has requested
   Chattanooga share funding for these
                agencies:
        •County Health Department

        •County Civil Defense (Emergency Services)

        •Erlanger Hospital

        •Regional Planning Agency

               Define Share
     Summary of Tax Equity Issues
1.   Only 5 of 10 municipalities donate Sales Tax as per the Sales Tax
     Agreement.

2.   Only 3 of 10 met funding requirements in 2009.

3.   City Taxpayers donate twice for some of same agencies:
        •    Chattanooga donates Sales Tax revenue plus City property tax
             added.
        •    Chattanooga donates Sales Tax and pays 58% of Hamilton County
             property tax.

4.   84% of all agency funding may be excessive for one city to supply.
               Recommendations
1.   Let the Sales Tax Agreement Expire

2.   Hamilton County should fully fund its legal requirements:
      a.   Health Department
      b.   County Civil Defense (Emergency Services)

3.   Chattanooga will fully fund:
      a.   Chattanooga Public Library
      b.   Regional Planning Agency
Proposed Sales Tax Disbursement
               Chattanooga fully funds
         Regional Planning Agency*
                                  and

                   Public Libraries *
                     (located in Chattanooga)

Freeing the County of $7.3 million
      in funding obligations
*Other governments will be offered services on a contract for fee basis
Proposed Sales Tax Disbursement
   Remaining $3.3 million will be
             allocated
     (at City Council’s discretion)

          To fund agencies
       providing services to
  City of Chattanooga Taxpayers
           Proposed
  Chattanooga short term Goals
1. $10.6 million will go to selected
   Agencies providing services for
   Chattanooga taxpayers.
2. City Property Tax will move focus to
   City Services.
           Proposed
  Chattanooga Long term Goals

       Tax Equity for all citizens in
            Hamilton County
(whether living in or out of a municipality) in Hamilton County.
          Together

  City Council Members and
Hamilton County Commissioners
   will achieve equilibrium
         on this issue.
       Decision Points for Council
1. Affirm or Deny Sales Tax Agreement
   Resolution

2. Council Consensus Opinions
    a. Library Urgent Urgent
    b. Regional Planning Agency Urgent
    c. Health Department Urgent
    d. Civil Defense (Emergency Services) Urgent
    e. Council discretion for others
Questions

				
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