State Shared Taxes

This is a little long, but I wanted to share a potential problem for Lakeland. For some reason, some Tennessee State Senators and Representatives are targeting cities without property taxes. Lakeland residents don't pay property taxes, but also don't receive the services of other cities. For example, a nearby City Mayor said his residents wanted "4 minute ambulance service and are willing to pay for it". Great! I agree. However, Lakeland residents are satisfied with the "12 minute response".

I don't see the problem with local determination! I hardly think some Tennessee State Senators and Representatives in Nashville should be telling Lakeland residents what local services we need!

Below is an analysis of a contrived attempt to take money from cities without property taxes, apparently so Tennessee State Senators and Representatives can get funds for their pet "pork" projects in their districts!

This is a little long, but it is important. Please contact me if you have any questions or desire additional information.

STATE SHARED TAXES


The City of Lakeland receives an estimated $750,000 (over 27% of the City General Fund Budget) per year in State Shared Taxes.

These are taxes paid by all Tennessee residents which are returned to the cities for use in providing services to residents.

-Revenues returned to City are based on population. For cities, the revenue is approximately $90 per year per resident.

-State shared taxes include revenues collected by the State from:

-Gas taxes (The City MUST use the revenues from gas taxes for street maintenance or improvements.)

-State Sales Tax (This is distributed based on population from the state sales tax, which is based on statewide sales. The City also collects an local option sales tax based on sales only in Lakeland.)

-Hall Income Tax.: This is an “income tax” collected on investment income only. The City share is based on the “hall income tax” paid by City residents, which is an exception to the “return based on population” of State Shared Taxes.

-Other lesser categories, but these are the major items.

The City of Lakeland uses State Shared Taxes for street maintenance and improvements (usually in the range of $200,000 to $300,000 per year) and other services.

YOUR HELP MAY BE NEEDED ON:

REINSTATEMENT OF STATE SHARED TAXES:

Several years ago, State Shared Taxes were reduced (for Lakeland this was about a $43,000 reduction)

The Governor’s budget this year includes reinstatement of 50% of this loss, or approximately $21,500, with the other $21,500 restored next fiscal year.

Depending on the TennCare situation, we expected the funds will be reinstated if possible.

CITIES WITHOUT PROPERTY TAXES.

A State Legislative Study committee, for some reason, did a study on State Shared Taxes and Cities without property taxes.

The study used out of date and frequently erroneous material, but attempted to justify reducing or eliminating State Shared Taxes to cities without property taxes, even though no good reason was given.

We feel each City and residents has the right to decide on their own what services should be provided and what taxes should be paid. This is an unwarranted invasion of local rights by State politicians who apparently want to divert the funds to “pork barrel” wasteful projects in their districts.

No current legislation has been introduced to cut sales taxes to cities without property taxes, but an existing bill could be amended with little or no notice to eliminate state shared taxes to cities without property taxes.

Both Senator Mark Norris and Representative Bubba Pleasant support the continuation of State Shared Taxes without discriminating against cities without property taxes.

Obviously a lost of over 25% of our revenues would seriously hurt the city in maintaining streets, parks and other City services.

We urge all residents to support the continuation of State Shared Taxes when you talk with Senator Norris or Representative Pleasant of other Tennessee State elected officials.

In the event a bill is amended to penalize cities without property taxes, we urge you to call, write and visit all Tennessee Senators and Representatives to not pass the bill, and urge Governor Brehenson to veto any such bill.