November 5, 2024
By: Dwayne Page
Under one condition!
The Smithville Mayor and Aldermen met in regular monthly session Monday night at city hall and voted to extend the city’s sales tax agreement with the county by 18 years through 2055 so that plans can be made for building a new elementary school. But the vote came with one condition. That the county issue bonds for construction within 12 months. Otherwise, the deal is off.
Meanwhile, the Liberty Mayor and Aldermen also met Monday night in Liberty and voted to extend the sales tax agreement by an additional 18 years but unlike Smithville, Liberty did not make the extension conditional upon the county issuing bonds within 12 months. In Liberty, Aldermen J.D Bratten, Ryan Dodd, Kevin Mullinax, Howard Reynolds Jr., and Kendra Stanford all voted in favor.
Under the existing sales tax agreements with the county, which are set to expire in 13 years on July 16, 2037, the cities turn over to the county for schools a greater percentage of their local option sales tax collections than they would otherwise be required to do. That money goes into what is called the Local Purpose Tax Fund for Schools to help fund school operation and debt. Officials say the county must be able to count on that extra sales tax money coming in from the cities over the life of a 30-year bond up to $55 million in order to cover the costs of a new school without having to use or raise property taxes to fund it.
“If you pass this there needs to be a clause that if something is not passed and a bond is not issued in 12 months it goes back to the original contract (which the city is bound to through July 16, 2037). There has to be accountability to this. You can’t vote to extend it (sales tax agreement) and a school not be built. And if Alexandria, Liberty, and Dowelltown decide they are not going to extend it and you (county) cannot build the school we have done our part”, said Smithville Mayor Josh Miller.
The vote in Smithville for conditional approval was 4-0-1 in favor. Aldermen Danny Washer, Shawn Jacobs, Jessica Higgins, and Donnie Crook all voted in favor. Alderman Beth Chandler passed. Although Alderman Chandler is in favor of a new school, she has reservations.
“I am all for a new school but breaking it down by year they (county) are basically getting roughly $2.18 million each year from the City of Smithville. What is required of us is $1.6 each year so what they are asking from the city is to give another half a million dollars each year on top of the $1.6 million. I am for a school, but I do want to make sure that this clause is put in (for county to issue bonds within 12 months) because that’s a big chunk. That is not a small amount, and this goes up through the year 2055,” said Alderman Chandler.
“The city, by law is required to give 50% of its sales tax money to the county which goes to the schools. But we (city) give two thirds (by agreement). Since 2008 we have given a little over $35 million. That is what the state has sent into the county and of that the 50% is a little over $26 million. Of the extra money that we have given above what we have been required to give is $8.8 million,” explained Mayor Miller.
“Over the last few years, they (county) have paid off the Northside Elementary School (construction debt with this sales tax money through debt service). The high school cafeteria was built (and paid off). The West School classrooms and tornado rooms were built (debt not yet retired) and I know they put new lighting up for the schools, etc.” said Mayor Miller.
Last Monday night, the county commission went on record pledging to fund construction of a new Pre-K to 2nd grade school if the four city governments in the county, Smithville, Alexandria, Liberty, and Dowelltown vote to extend their existing sales tax agreements with the county by January 1, 2025 as recommended by the county budget committee. If the four cities agree to do that, the county will act on a 30-year bond resolution not to exceed $55 million to fund construction of a new school. If the cities don’t extend their agreements, the county will not proceed on its own.
According to the Tennessee Department of Revenue, Smithville by far collects more local option sales tax money than all the other three towns in the county combined.
For the month of September, the state reports that Smithville took in 413,057 compared to Alexandria at $31,445, Dowelltown’s collections for September were $3,246 and in Liberty it was $19,266.
Net collections of local option sales taxes for the county and cities combined in September were $693, 524.
Again, under state law half of the cities’ local option sales tax collections go to the county but by agreement, the cities actually turn over two thirds to the county to help fund school operation and school debt.