City officials discuss sales tax
City officials may opt for another public vote to increase the local option sales tax after meeting for an annual planning session.
The planning session normally serves as an opportunity for leaders to exchange ideas openly but is not designed as a formal meeting. During the planning session, officials indicated a desire to schedule another sales tax referendum similar to the one defeated in January.
The January referendum asked city residents to vote to increase the local option sales tax from 2 percent to 2.75 percent, which would make the total sales tax in McMinnville 9.75 percent (7 percent state sales tax and 2.75 local option). The state maximum is 9.75 percent.
University of Tennessee Municipal Technical Advisory Service advisor Don Darden warned officials attending the planning session at Fall Creek Falls last week that this year’s state budget problems may get passed on to local municipalities and counties who rely on state-shared taxes. He asked them to look at protecting their revenue sources.
That threat has been a common local concern for the past several years, but was discussed in earnest at the state level last year, and city officials fear reductions would translate into large property tax increases if they become reality.
They estimated more than $1 million could be taken away from the city’s general fund if all state-shared funds are withheld. According to the Associated Press, state officials are currently looking at the Hall income tax, which last year netted the city $126,000.
City leaders indicated the extra .75 percent (3/4 of 1 percent) in local option tax, if approved, would help to offset losses to the city if state shared taxes are withheld or if other state-mandated and state-reserved tax increases were implemented.
Other items addressed at the session, which is also known as the mayor’s planning conference, were city communications, marketing through a Web site, maintenance, beautification, business development, city hall needs, zoning, customer service, as well as annexation.
Mayor Royce Davenport emphasized the importance of meeting in a place where distractions are minimized after sessions were completed Saturday.
He said while no votes are taken, it’s important to have an idea about where the city stands on several different issues. Additionally, it was a way for three new aldermen to discuss ideas, he added.
“I think that will pay off in every meeting after this. They know each other a little better and understand where each other is coming from a little better,” Davenport said. “You don’t get that in a formal setting for an hour or two every two weeks. This gives them a little more of a team effort feeling.”