Group seeks more control for local governments

NASHVILLE, Tenn. Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. ? An organization of government officials want changes in state law to make it easier for Tennessee cities and counties to impose or raise taxes, but some state lawmakers and lobbyist groups are opposed.

A majority of the Tennessee Advisory Commission on Intergovernmental Relations recommended eliminating the current requirement that increases in city or county sales taxes be approved by local voters in a referendum.

The proposal from Senate Finance Committee Chairman Douglas Henry, D-Nashville, received wide support from city and county officials who are members of TACIR.

The group also recommended allowing cities and counties to impose taxes on development and real estate transfers by simple majority vote of county commissions and city councils. Currently, no real estate transfer taxes are authorized for local governments ? though state government collects such a levy.

Some local governments do have development taxes, typically called “impact fees” or “adequate facilities taxes,” but each such tax must be approved individually by the state Legislature.

For the last two legislative sessions, however, legislators have balked at approving any new local development taxes. The taxes are also opposed by lobbyists for Realtors and homebuilders.

Most legislators who serve on the commission opposed the recommended changes, including Rep. Randy Rinks, D-Savannah, who chairs TACIR.

“I think most legislators are for giving them (local governments) more autonomy,” said Rinks. “But there ought to be some accountability in there.”

Otherwise, he said, some governments might keep their sales and property tax rates unreasonably low while slapping big fees on development, thus leaving one segment of the economy to bear a disproportionate share of the tax load.

“Some of these communities, if you give them an easy way out politically, that’s the way they’ll take,” Rinks said.

Henry’s proposal to eliminate the present requirement for voter approval of a local sales tax increase prompted less debate.

“County commissions and city councils have long been entrusted with setting the property tax rates,” Henry said. “I see no reason why they should not be entrusted with the same authority with regard to the local sales tax.”

But Ben Cunningham, a founder of Tennessee Tax Revolt, said the proposal is “a terrible, awful idea because it takes away from citizens a direct say in the process” through a referendum.

As for the proposal to authorize local governments to impose new taxes on development and real estate transfers, Cunningham said the principle of giving local governments more authority is valid but offset by “offering a way to assault taxpayers with this new barrage of options and no referendum at all.”

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Information from: The Knoxville News Sentinel, http://www.knoxnews.com