CLARKSVILLE, TN (CLARKSVILLE NOW) – Following a City Council presentation outlining why the City of Clarksville needs to revise the local options sales tax split with Montgomery County, County Mayor Wes Golden said he believes the move would shift 100% of the tax burden to county residents.
Proposed negotiation between City of Clarksville, Montgomery County
On Thursday, Councilman Brian Zacharias said he’s spent a lot of time looking over the city’s budget and shared his findings with the council that shows the city is “at the edge of a fiscal cliff.”
Zacharias said this year’s budget spends $6.9 million more than the city brings in, which comes after the council raised the property tax rate 9 cents and made $9.2 million in cuts during the budget process. He said the city is covering the difference with reserves, but if nothing changes, projections show the gap could grow by $25 million per year by FY 2031.
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Zacharias said the city is the economic engine of Montgomery County, which is the reason the city and county should look to revise the split of the local option sales tax. He gave examples of how to phase the restructuring, as well as suggested ways the county can cover the difference.
Zacharias said next month, he plans to bring a proposal to the City Council to enter into negotiations with Montgomery County regarding the split. He said he believes the County Commission would have to approve something similar as well on their end.
Golden on impact changing local options sales tax
Golden said this week the existing sales tax agreement was approved by a voter referendum, specifically to support local schools and help fund teacher salaries, and the change would shift 100% of the tax burden to county residents.
“Currently, visitors and people who live outside Montgomery County generate more than 30% of that revenue, helping offset the cost for local residents,” Golden told Clarksville Now. “Changing this agreement would shift 100% of the tax burden to our residents.
“We work hard with department heads and elected officials to be fiscally responsible with the funds we’ve been entrusted with. Removing these funds from the school system could result in a county property tax increase, cuts to County and Clarksville Montgomery County Schools services, or both,” Golden said.
Clarksville Now asked the chair of Montgomery County Commission, Rashidah Leverett, whether the proposal may appear before the County Budget Committee during the month of October.
Leverett said the Budget Committee agenda has not been finalized, and once it has, we should have a clearer picture of what’s next.
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