Tax petition looms large for county

  By Thomas Wilson
  star staff
  twilson@starhq.com
  Organizers of a petition that could change the economic structure of Carter County and Elizabethton have one more week to gather names in support of a referendum practically unheard of in Tennessee.
  Roan Mountain residents Sam McKinney and Ralph Potter have submitted a petition bearing more than 4,200 signatures to the Carter County Election Commission office an effort to place a referendum on the November ballot calling for the repeal of the county's 2.25 percent local option sales tax. A move the two say is intended to rattle county officials.
  "We just want to get their attention," Potter told the Star on Friday.
  Apparently, they have succeeded.
  While referendum proponents say the petition is intended to force county leadership's hand on local taxation issues, others liken the idea to performing economic euthanasia on a county already fighting for its financial survival.
  If the petition contains the minimum number of signatures - 3,016 or 10 percent of county citizens registered at the time the petitions were submitted to the Election Commission - voters will see the referendum on the Nov. 2 election ballot. The state Division of Elections issued a ruling last week that additional names supporting the referendum could be submitted to the election commission office until the deadline date of Sept. 3.
  County election officials have spent two weeks verifying signatures on the petitions that were turned in earlier this month. The signatures are only valid for county residents who are registered voters. With the November ballot already heavy with a city election as well as a state and federal election, election officials face a difficult task as Election Day draws near.
  "We can't get ready for our November election like we need to because we have to do this," said Jennifer Martin, deputy election officer.
  Martin said the commission had verified 1,918 signatures through Friday.
  If the petition makes it to the ballot and is passed by voters, finance directors for the city and county estimate both governments would lose $3 million each. Since a municipality's local option sales tax is tied to funding through the Basic Education Plan (BEP), the city and county's schools would take the biggest financial hit.
  Elizabethton City Schools Superintendent Dr. David Roper said last week the school system would lose roughly $1.1 million in funds if the local option sales tax was repealed.
  "Obviously, it would have a devastating impact on us if would lose that revenue," Roper said last week.
  The county school system could lose up to $2.4 million if the local option sales tax is repealed. County Superintendent Dallas Williams said eliminating the local option funding could make county school consolidation a possibility and effectively destroy the county's more rural school families.
  "In Carter County, we have community schools that are located in remote parts of the county," said Williams. "We will lose the concept of our community schools."
  City and county land owners are all but certain to see their property tax rates soar to cover the shortfall.
  David Huss, executive director of local finance section for the Tennessee Department of Education, said the Carter County and Elizabethton governments both would have to replace any local funds that had gone into local option match before to the state would release BEP dollars to fund the school systems' operation.
  "We do not release the state BEP funds until they have a budget that meets the mandates of the law," Huss said.
  The local option sales tax of Carter County funds the county and city's local share of the BEP funding. BEP regulations strictly prohibit a municipality from reducing the local option dollars allocated to a school system. The county must submit its budget to the state by Oct. 1.
  The county turns over locally collected sales tax revenue to the state, which deducts an administration fee and returns the local option revenues to the collection point of county and all cities located within the county.
  Huss said he was unaware of any attempt to repeal the local option sales tax in any other municipality around the state.
  "Across the state, that is one of the two major sources of local revenues," said Huss. "I would not even attempt to think how they are going to replace that."
  The county is under a federal court order to have temporary housing for Carter County Jail inmates and hire additional jailers by next month under a settlement of a class-action lawsuit filed by inmates for overcrowding conditions earlier this year. The court order also requires the county to have permanent jail housing by 2007.
  The County Commission has discussed ways to fund the mandate with an increase of the county's existing $2.22 property tax rate being the most talked about option. Potter and McKinney are part of the Concerned Citizens of Carter County group that frequently attends meetings of the County Commission and its committees. They said the jail issue has been ongoing for a number of years and county leadership did nothing to solve it.
  "They knew we had real serious problems over there for years and they did nothing," said McKinney, who felt the property tax increase amounted to a "scare tactic" by the commission.