Voters to decide local sales tax rate in referendum tomorrow
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McMinnville voters will go to the polls Thursday to decide if the city will raise the local option sales tax from 2 percent to 2.75 percent. The same measure failed in referendum by a slight margin last year and a similar vote for the entire county is scheduled for next year. Should the measure be defeated, city property taxes will likely increase. Balloting will be held from 9 a.m. to 7 p.m. Thursday at polls around the city.
Along with the threat of a property tax increase, some supporters of the sales tax increase have warned of another danger. They say the downside of voting down the sales tax hike is that the financially strapped state may look to take any local option sales tax, up to 2.75 percent, which has not already been claimed by municipalities.
According to legislators who represent Warren County in the General Assembly, such an action was considered recently, but defeated.
“There was some discussion of doing that last year, but there weren’t enough votes for it and I don’t think there are enough votes yet,” said state Rep. Charles Curtiss.
“The state was looking at it as a short-term thing, as a quick fix, but it really wouldn’t be fair to communities who may find themselves in need of the money,” Curtiss continued.
State Rep. Judd Matheny echoed the comments made by Curtiss, saying it appears there is not support to on Capitol Hill to grab the unclaimed local option sales tax revenue.
“Right now I don’t see any support to do that and I’m not hearing any rumors to that affect,” Matheny said. “Of course, things can change with the speed of lightning in Nashville, so you never say never.”
While not envisioning such a move by the state, both lawmakers noted it is not out of the realm of possibility.
“I’m not saying it’s beyond the realm of reason, but right now it’s highly unlikely,” Curtiss said.
Matheny noted it would take the support of both houses and the governor to pass such a measure.
“Theoretically, it could happen,” Matheny said. “But, it would take some time to do it and right now I’m not seeing any support for it.”
State Sen. Jerry Cooper, however, is not so confident about the safety of local option sales tax money.
“I think it’s a real possibility,” Cooper said, noting there is concern by many municipalities who are yet to max out their local option sales tax.
Cooper said as budget time approaches, Gov. Phil Bredessen will begin looking at ways to finance the various state departments. At that point, nothing is really safe.
“Governor Bredesen will be looking at his options, so there’s a chance the local option sales taxes could be one of them” Cooper said. “They took back the state-shared taxes this year, and that’s something I didn’t think I would see happen. So, this means lots of things could happen when they start looking at ways to fund departments.”