Growth tax choices sought by the Rutherford County Fee

  • Commissioner Jeff Phillips says state law blocking alternatives to development tax is unfair to the county
  • The commissioners turned down the option of $ 1 per square foot for new homes
  • Commissioner Craig Harris says the goal for development tax alternatives is to avoid an increase in property tax
  • Senator Shane Reeves says the commission’s decision to be exempt from state law is “dead on arrival”.

A unanimous Rutherford County Commission wants lawmakers to approve alternative development taxes to fund projects needed for growth.

“We approve literally thousands of new single-family homes every year,” said Commissioner Jeff Phillips on Thursday, calling for the 21-0 vote.

Commissioners are demanding additional revenue options from the Tennessee General Assembly aside from the 20-year-old development tax of $ 1,500 per new home. However, state law prohibits an increase in development tax to help fund government projects for a rapidly growing population, which reached 332,285 in 2019. This is an increase of 26.5% from the official US census of 262,604 in 2010.

Phillips mentioned how La Vergne officials agreed to triple their impact fees for each new home from Jan. 1 to $ 3,718 after holding the rate at $ 1,307 for 22 years. Murfreesboro officials are also following consultant proposals to pass an Impact Fee for the first time.

“If Murfreesboro needs it, if La Vergne needs it, why should Rutherford County be exempted from using anything as an alternative to raising property taxes?” said Phillips, who called for an approved 5.7% increase in property tax in 2019 to prevent the county from exhausting savings on rainy days to fund education and government services.

$ 1 per square foot fee for rejected homes

The unanimous vote should show support for the preparation of a formal resolution to be submitted to the legislature. The Commission’s Steering, Legislative and Government Committee will consider a formal resolution during a meeting on January 4th at 5:30 pm at the County Courthouse in downtown Murfreesboro.

The resolution calls on the Tennessee General Assembly to exclude the county from the 2006 legislature easing act to ease the powers of the county. That bill allowed fast-growing counties to impose a tax on school facilities of $ 1 per square foot for housing.

If a tax is introduced for the county school facilities, the commissioners can increase it by 10% every four years. However, the commissioners chose not to pursue this option after former Mayor Ernest Burgess raised concerns about collecting revenue after the development and sale of houses was complete.

The existing development tax must be paid before buying the house. Half of the cost is for planning and technical reviews, while the other half has to be paid for obtaining building permits.

Reeves: resolution ‘dead on arrival’

State Senator Shane Reeves, R-Murfreesboro, said it would be difficult to exempt Rutherford County from the County Powers Relief Act without affecting all 95 counties in Tennessee.

“So it would be dead by the time it arrived at the General Assembly,” Reeves said.

The Senator recommended that commissioners consider changing the development tax through their charter. The County Commission, with the assistance of the Tennessee General Assembly, could adjust its development tax to charge $ 1 per square foot for new homes.

Reeves said another option would be for the commission to work with the county’s delegation of state lawmakers to pass laws and provide additional funding for the basic education program for fast-growing school districts.

The aim is to avoid an increase in property tax

The $ 1 per square foot fee option would be less beneficial as there are many homes being built in the county, often in the 800 square foot area, Commissioner Craig Harris said.

The county also needs to avoid high development taxes that could cause the property market to stagnate, said Harris, chairman of the steering committee.

Harris expects his committee to meet with the county lawmakers during a meeting on February 1 at 5:30 p.m. in the county courthouse. The annual meeting with commissioners and lawmakers usually takes place in early January, but Harris said the event had been postponed to February to prevent the spread of COVID-19.

The goal of working with state lawmakers is to help the district commission avoid increasing property taxes, Harris said.

“That’s something I definitely don’t want to do,” Harris said, adding that the county needs more revenue to build roads and other projects to serve its growing population. “We keep coming back.”

Phillips: The law is unfair to the county

Rutherford County Commissioner Jeff Phillips is calling on the commission to pass a resolution exempting the local government from the count easing law passed by the Tennessee General Assembly in 2006.  The law prevents the county from increasing the existing 20-year-old development tax of $ 1,500 per new home.

Phillips asked why cities can levy impact fees, but the county is unable to generate alternative income from the existing development tax enacted in 2000.

“Is it fair for the state legislative delegation to say no to us and we have to turn around and raise property taxes?” Said Phillips. “It just doesn’t make sense to me why the state dictates what a particular county needs.”

Phillips also chairs the county’s regional planning committee, which takes into account developments outside the cities. He’s seen proposals for hundreds of houses on former cattle roads that barely have enough space for two cars to pass safely. Revenue is needed to improve these roads.

“We can no longer sustain growth,” said Phillips.

Reach reporter Scott Broden at [email protected] or 615-278-5158. Follow him on Twitter @ScottBroden.