State may not snatch so much money
A state official said Friday the likelihood of withholding all of the Hall Income tax shared with the city by the state is decreasing.
Asked about the possibility the proposal was being reconsidered, Gov. Phil Bredesen’s press secretary Lydia Lenker confirmed the idea has been reevaluated but made it clear the idea is an option.
“The governor is looking at different options to be able to fill this massive budget hole and right now, one of the proposals is taking 9 percent of state-shared taxes and 9 percent of the Hall Income tax. Again, it is an option,” she said.
State-wide, local governments stood to lose around $50 million. In McMinnville, the amount of Hall Income tax was about $126,000 last year. The city’s total state-shared taxes total just under $1.5 million.
Under the most recent proposal, only around $11,000 in Hall tax could be withheld from the city compared to the previously feared $126,047. Under the scenario of withholding 9 percent from Hall tax and 9 percent of the rest of the state shared taxes, McMinnville stands to lose around $134,000, rather than around $250,000 as previously estimated.
Lenker said the governor believes the option is a fair way to go.
“Part of the reason is when the governor looked at those numbers, the Hall Income tax falls erratically state-wide, “she said, noting one local government could be affected more than another.
“It’s a very hard task, when you’re cutting so deep, but he wants it to be as fair as possible and taking all of it in the end did not seem like the fairest option.”
City Administrator Herb Llewellyn said he did get wind of the change but said he understands legislation has already been introduced to withhold the Hall tax.
“That is good news and it makes me cautiously optimistic,” he said, noting concerns about street aid reductions.