The Bradley County Commission approved Resolution 2012-13 in March to call a countywide referendum on the question of whether or not a motor vehicle tax should be levied.
The referendum on the wheel tax that will appear on the Aug. 2 ballot asks: “Shall a motor vehicle tax to be assessed on residents of Bradley County, Tennessee, beginning January 1, 2013, in an amount of $32 for each motor-driven vehicle and $16 for each motorcycle owned by them (except motor vehicles not taxed by the State of Tennessee and motor-driven vehicles owned by any governmental agency or governmental instrumentality), the proceeds to be dedicated to the Debt Service Fund, for principal, interest, and fees on education capital projects, be approved?”
Vehicles exempted from the tax include motor-driven bicycles and scooters, farm tractors and self-propelled farm machines not usually used for operation on public highways. Other exemptions include former prisoners of war and disabled veterans with a 100 percent permanent service-connected disability.
The tax would be levied on large tractor-trailer trucks, but not trailers since they are not motor-driven vehicles. The wheel tax will be included in registration notices from the Tennessee Department of Revenue and will be paid to the county clerk or through online registration through the state.
Everyone not exempted by state law would be required to pay. However, low-income elderly residents could apply for a refund from the Bradley County Commission if they are at least 65 years old and have an annual income of less than $14,100.
If approved by voters, the tax would support education projects for both the city and county school systems to address capital outlay projects that fall outside the scope of their annual operating budgets.
The county school system has three priority needs. At the top of the list is replacement of Blue Springs Elementary School which was destroyed in the April 2011 tornadoes; renovations and improvements for Lake Forest Middle School; and classroom expansion at Walker Valley High School. The portion designated for Cleveland City Schools is locked in for a new elementary school on the north side of town.
Bradley County School Board Chairman Charlie Rose and attorney Bill Brown argued voters should approve a $32 wheel tax. Attorney Andrew Morgan and Dr. John Stanbery argued against the resolution during an hourlong discussion Tuesday evening in the third of three political forums sponsored by the Bradley County Bar Association and Cleveland Lions Club.
Morgan, a bankruptcy attorney, said voters should oppose the wheel tax referendum because no one knows what the future holds and it might not be possible to simply make the payments to pay off the debt.
“The problem is, I don’t want Bradley County to be the next person to walk in my door saying, ‘I can’t make the payments anymore.’”
Rose said the voters of Bradley County need to step forward and pass the wheel tax to support educational needs identified by both the city and county school boards.
“We can put it off. We can wait and say we don’t have these needs, but I haven’t heard anybody say that. Everybody recognizes we have the needs, just how do we get over the big hurdle?” he asked.
Based on election cycles, he said it would be eight years before the needs could be addressed if the resolution fails in August. Even if the referendum is approved, it will still be 1 ½ years before the board can start building schools.
“We are talking about driving a vehicle for 20 years — $640 for every vehicle you drive,” he said. “I think that is a small price to pay when we have such a good school system. Bradley County Schools operate on a very, very small budget.”
Stanbery asked how if Bradley County cannot currently borrow money, how would it borrow additional money in the next few years after adding $32 million to the debt load.
“Will the school board approach the County Commission and ask for more funds before we can pay off the $32 million loan? If so, how will we pay for those requests? What happens if we have another natural disaster or an unforeseen circumstance in the next few years? Will the Bradley County government guarantee the taxpayers there will not be any need in the next 20 years for new schools, new roads or services? If they won’t give that guarantee, how much higher will the wheel tax have to go and will property taxes be increased?
“Pass or fail, we have a serious debt problem in Bradley County because we’ve raised the local portion of the sales tax to the state maximum by law. We can’t raise the sales tax any higher and a property tax increase can’t happen this year because the County Commission has already set the rate. If the sales tax referendum fails, we are forcing our government to live within its means and focus on priorities. Pass or fail, our government is not able to borrow any more money without additional sources of revenue.
“As citizens, we either say ‘no’ to excess spending or we accept an additional $32 million in debt and the possibility of an increase in property taxes.”
Brown said Stanbery acknowledged the wheel tax would bring the school systems up to what is needed.
“The whole idea is that we need to wait because we need to live within our means,” Brown said. “There will be a burden and the question is: Who will that burden be placed on? I’ve got an office downtown. The burden won’t be placed on me and most people in this room, it won’t be put on you.
“But those kids who go to Walker Valley High School who don’t have classrooms, who don’t have resources, their education is going to be taxed and the question is their future. Those kids at Lake Forest, we keep hearing they put it in a swamp. We’re not talking about a swamp. We’re talking about a roof, that it is more cost-effective to build a new building than fix that roof. What about those kids? When we talk about the kids at Blue Springs Elementary School who had their school blown down, what about them? What’s the tax burden on them and what are we waiting on, for more problems to raise their heads?
“The question is not whether or not there will be a burden. The question is whether or not Bradley County is prepared to deal with the burden today. If it doesn’t, it lets those teachers and those kids pay the taxes on their education. For me, that’s a problem for a community that has invited the world to come to Bradley County.”
Other points raised during the discussion included Brown’s assertion the leaking roof at Lake Forest Middle School affected habitability and the structural integrity of the building itself. The loss of Blue Springs Elementary School is causing overcrowding in other schools and Walker Valley High School students are eating lunch in the hallway because the cafeteria is being used as a classroom.
Stanbery said Bradley County is $78 million in debt and it rises to approximately $110 million if the referendum is approved. No one argues the needs do not exist. The disagreement is holding elected officials accountable for making bad decisions by choosing to build the fine arts building at Bradley Central High School instead of fixing Lake Forest Middle School.He asked, why not fix the middle school with the money available to fix an existing problem and then vote on whether or not to build a fine arts center. If the public continues to bail out bad decisions, he said, the public will continue to get bad decisions.Brown said a property tax increase was used to address the previous debt load required to meet the educational needs. In a political move, the County Commission chose not to fully deal with the debt. The opportunity now exists to commit a revenue stream completely dedicated to that by resolution.He said elected officials made the decision to build the Fine Arts Building and they can be held accountable at the ballot box. But, he asked, when a school is blown down by a tornado, whose decision was it to blow that building down and whose decision is it to put it back?
He said the issues facing the city and county school systems have to be addressed today.
Stanbery said there was a full replacement policy on Blue Springs Elementary School. The school system was paid nearly $1 million. Instead of using the money to replace the roof, they opted to build a new school.
If the wheel tax is not passed, the County Commission is forced to take a look and make spending cuts. The county spends more revenue than it collects.
Rose said a new school could not be built on the undersized and landlocked property. The cost of rebuilding would be exorbitant. A new energy-efficient school will pay for itself over time. He said the children deserve better and the county can do better. More than 80 percent of the students receive free and reduced lunches. The only hope many of them have is education.
Morgan likened the situation to wrecking his 3-year-old pickup truck that gets 16 miles per gallon. He then takes the insurance payoff and puts a down payment on a Mercedes Benz that gets 25 mpg and has a monthly payment. There are good and bad decisions. Past decisions made by elected leaders affect future decisions. His concern is that buildings do not teach children. Teachers teach. He said “wants” are being placed before “needs.”
Brown said every school in Bradley County was built with bonds. If the argument is the county government must live within its means, there would be no schools.
Morgan said officials can be replaced, but the debt stays. The county has no more assets and no more collateral to borrow money.
Rose said the projected interest rate is 5 percent, but the predicted rate is 2 ½ to 3 percent. Any money left over would go toward existing debt. The wheel tax would raise $32 million over 20 years at 5 percent.
Stanbery said over a 20-year payout, the county would pay $14.5 million on a 4 percent loan, which he pointed out is the equivalent of a new elementary school. Only the interest is paid on the Park View Elementary School bond for the first 12 years. A child who began the first grade in 2011 will graduate before any payments on the principle are made.
Brown asked why the County Commission and City Council did not raise property taxes higher in order to pay off debt sooner. The reason is because the public complained and rejected the idea of paying for needs. That behavior keeps local government in perpetual debt.
Early voting for the Aug. 2 election continues through July 28, Monday through Friday from 9 a.m. until 6 p.m., and Saturday from 9 a.m. to 4 p.m. The three early voting locations are at the Election Commission Office, 155 Broad St., N.W.; Bradley Square Mall Conference Center, 200 Paul Huff Parkway, N.W.; and BI-LO Store No. 343, 2310 McGrady Drive S.E.