Mayor: Lack of liquor law has lost eateries for city

By Thomas Wilson
STAR STAFF
twilson@starhq.com

   Has the inability to sell alcoholic beverages damaged one avenue of economic development for Elizabethton?
   Yes, according to the city's mayor, who says upscale chain restaurants didn't locate in Elizabethton because the county and city don't sell liquor-by-the-drink.
   "We have been told informally on more than one occasion by the restaurant chains we have talked to they are not interested in an area that doesn't serve liquor-by-the-drink," Mayor Sam LaPorte told members of the Elizabethton Rotary Club on Wednesday. "If we do obtain a neighborhood in which we have (alcohol), they would be interested in talking to us."
   A county or city can earn the right to serve alcohol via public referendum placed on the ballot for a county election. State law requires a petition bearing the signature of at least 10 percent of the total number of registered voters in the county or municipality who voted in the most recent gubernatorial election.
   If a petition for referendum were initiated for the city of Elizabethton only, the petition would need only 10 percent of those voters from Elizabethton -- approximately 310 citizens -- to bring the referendum to the Aug. 5 county general election ballot.
   As the meeting's guest speaker, LaPorte also talked about challenges facing the city given rising health care costs and stagnant tax revenues. Elizabethton city government has slashed its budget by double-digits in each of the past two years as state-shared revenues have diminished and local sales tax revenues have stagnated.
   While the City Council also performs as the city's Beverage Board to regulate the sale of beer at licensed establishments in the city, the Tennessee Alcoholic Beverage Commission issues liquor licenses for restaurants and package stores.
   A county-wide local option sales tax referendum on the Feb. 10 ballot could mean big dollars for the city if voters pass the measure. Voters will vote yes or no to raise the county's local option sales tax rate by one-half percent from 2.25 percent to 2.75 percent.
   County commissioners were faced with the quandary of putting a sales tax increase to a referendum when state lawmakers informed county governments a raise in the sales tax could be mandated by the state. If the state mandates the raise, revenue generated could go directly into state coffers. Elizabethton government would stand to receive $1,066,000 in new sales tax revenue, according to estimates of the city's finance department.
   LaPorte said the state had the power to usurp shared revenues for use in the state government. "In all honesty, it would not surprise me to see them take that half percent," he said. "I'd rather see it stay at the local level than see the state take it."
   Carter County officials estimate the .5-percent increase would produce approximately $700,000 for the county. The Carter County School System would receive $500,000, while Elizabethton City Schools would see an estimated $200,000 in new dollars.
   LaPorte said the City Council has not taken a stand on the referendum, but added the decision of keeping tax dollars in the community or sending them to Nashville should make local voters think when they go to the polls. He said if the referendum passed, the city's revenue largess could boost infrastructure needs and perhaps restore budget cuts absorbed by city departments in the past two years.
   The city's police and fire departments have suffered budget cuts in the past two years as the city has cut its budget to make up ground for declining state-shared revenues.
   "It is hard to convince people to vote for more taxes," LaPorte said.
   He also noted one of the greatest barriers to economic development, according to analysis by local economic experts, is the lacking skilled labor force. A study conducted by East Tennessee State University found a serious skills gap in the workforce of Northeast Tennessee. While LaPorte said public educators were doing a good job, the region's high school dropout rate and skills gap did not bode well for major economic development with technology the common denominator in the new industrial age.
   On the positive tip, LaPorte talked up the city's accomplishments of the last several years in infrastructure improvements and no property tax increases since 1992.
   He also said restoration of the Elk Avenue Bridge would likely not be completed until spring. Extensive renovation work needed for the bridge and damage incurred during flooding last month have set the project back at least six months from its original completion date of November 2003.
   He also said the city could expect greater sales tax receipts from the new Wal-Mart Supercenter when it opens. Demolition work began earlier this month on the former North American Rayon Corp. building to make way for the super center store. Completion of the supercenter store is projected for August.