The Commercial Appeal

Memphis suburbs want more of sales tax revenues

- Dima Amro Memphis Commercial Appeal USA TODAY NETWORK – TENNESSEE

Municipali­ties across Tennessee are working together to push for a higher percentage of the state-shared sales tax.

Germantown’s and Colliervil­le’s boards of mayor and aldermen voted unanimousl­y Feb. 13 to support the resolution to increase the percentage of the state’s annual sales tax revenue that is distribute­d to municipali­ties.

Other Memphis-area suburbs also voted to support the resolution including Arlington, Bartlett, Lakeland and Millington.

During Feb. 13’s Germantown board meeting, Mayor Mike Palazzolo said Memphis Mayor Jim Strickland will also sign on for support. The City of Memphis’ Deputy Chief Communicat­ions Officer Allison Fouche confirmed

with The Commercial Appeal that Strickland supports the movement.

“We’ll make this a Shelby County effort,” said Palazzolo after announcing all six Memphis-area suburbs and the City of Memphis would sign on to a letter to Gov. Bill Lee urging the restoratio­n of the shared sales tax.

The Tennessee Municipal League, an entity that works with the Tennessee General Assembly on behalf of local government­s, calls the resolution Restore, Return, Relief.

But what does this mean for residents?

What is the state-shared sales tax?

Since 1947, the state and local government­s have had a revenue-sharing relationsh­ip — municipali­ties receive a percentage of the state’s total annual sales tax revenues assigned for the general fund.

In 2002, Tennessee raised its sales tax rate from 6% to 7%, but the percentage of shared tax given to the municipali­ties in the state did not increase, and 21 years later it still has not.

The state continues to return 4.6% of Tennessee’s total annual sales tax revenues designated for the general fund to the municipali­ties. The money distribute­d is based on the population in the municipali­ty.

The Tennessee Municipal League said municipali­ties with bigger population­s would benefit more from the state-shared sales tax percentage increase.

How can this movement help municipali­ties?

“The state has captured nearly $2 billion in additional sales taxes since 2002 that would have directly benefited local taxpayers,” Germantown City Administra­tor Jason Huisman said during the Feb. 13 board meeting. “Per (Tennessee Municipal League’s) estimation­s, Germantown would stand to collect an additional $762,000 annually in state shared sales (tax) alone.”

The league estimated Colliervil­le in fiscal year 2022 would have received almost $1 million — about $946,525.

The league also said Arlington would have received about $268,000; Bartlett would have gained $1,065,699.19; Lakeland would have collected more than $256,000; Memphis would have claimed about $11.6 million; and Millington

would have received about $195,000.

Now, the league, with the support of local government­s in the state, wants to restore the relationsh­ip, return “locallygen­erated revenues” and provide relief to municipal taxpayers.

“We are at that point where we need (the money) back,” Germantown Alderman Mary Anne Gibson said. “To be able to use $760,000 on an infrastruc­ture project for public works, for one of our ballfields to be turfed... in every part of our city we can see where those monies that historical­ly were here, aren’t here any longer.”

The Tennessee Municipal League said municipali­ties with bigger population­s would benefit more from the state-shared sales tax percentage increase.

Alderman Scott Sanders said if the state does give Germantown the money, the city would not have to increase about 4 cents on the property tax in 2024.

Sanders also said the new money could be placed in 4 miles of new pavement, a new ambulance or salaries for first responders.

Dima Amro can be reached at Dima.amro@commercial­

 ?? ?? Palazzolo
 ?? ?? Sanders
 ?? ?? Gibson

Newspapers in English

Newspapers from United States