How far can a half a cent go in today’s economy?
A group of Blount Countians say a half cent in sales tax increase could generate as much as $7 million annually. And they want the citizens of Blount County to vote that half-cent increase into being in November, with the money going to local schools.
A grassroots group of concerned citizens recently formed Blount Countians for Educational Excellence with the sole purpose of getting a referendum on the November ballot to raise the local option sales tax a half cent.
The mantra for the group is “Half a Cent is Money Well Spent.”
State law mandates the sales tax cannot go above 9.75 percent. With the current sales tax rate at 9.25 percent, group leaders say Blount County residents should claim the remaining .5 percent before the state claims it and uses the Basic Education Plan formula to siphon local dollars to school systems in other parts of the state.
Steve West, former Maryville mayor, car dealer and philanthropist, and Dr. Mike Dalton, former director of school for Maryville City Schools system, shared with Blount Today details of the group’s plan, who they are and why they want a referendum on the November ballot.
“It’s strictly grassroots,” said West. “There are various and sundry folks talking about this who are passionate about getting greater investment in education,” he said.
Each of the school systems has needs, West said. The purpose of the new group, which goes away after the November election, would not be to compete with other educational foundations and organizations. “We’re not trying to take anything from anyone. This is grassroots people talking to provide enhanced funding for education,” he said.
West said Blount County Schools had a deficit of $6 million this year, even as the new schools are being built.
“The new Union Grove Elementary and Middle schools are opening, and there are technology upgrades hitting the system, plus they’ve got the Porter school property that’s coming along,” West said, pointing to a need he says gets greater every year.
The former Maryville mayor said the city’s school system had a $1.6 million deficit. This came even as the system planned investments in technology and expansion of the high school, he said.
West said Alcoa’s school system had an increase of $370,000 over last year’s budget. The school board there is planning to build a new high school, renovate the elementary school in the process and create a new intermediate school, he said.
Melissa Copelan with Copelan Public Relations said each of the systems is growing, upgrading and renovating. That new technology and growth isn’t free, West said.
West said the half cent increase will add an estimated $7 million to the local education coffers, to be split between the three systems based on the same way the current portion of the sales tax is distributed to schools. It is based on a formula that looks at, among other things, Average Daily Attendance.
“We’re going to add $7 million to our education systems per year. The amount will grow as revenues grow,” he said. Sales tax revenues have grown at about 2 percent a year over the past 10 to 12 years. Tourist dollars and money spent by people who do not live in Blount County but shop or vacation here will mean that they will help pay for school improvements.
“We’re going to leverage out-of-town revenue,” West said. “We’ve got 35 to 40 percent of sales tax revenue coming from Monroe, Loudon and Knox counties. They come to Foothills Mall, the Motor mile; they come to the festival and Townsend.”
West said that while state law says the sales tax can not go higher than 9.75 percent and Blount County’s is at 9.25 percent, the state has talked about taking the last half cent of sales tax from those counties who haven’t maxed out. “They’ve talked about it. Probably half of the communities in state are maxed out. If the state does take it, they’ll distribute it across the state, and we won’t get that much,” he said. “If we control it, it stays with our two cities and the county. It stays in our communities.”
West said several communities around the state are looking at doing the same thing to help fund schools before the state has a chance to take that revenue. If voters throughout the county and two cities voted for this, the additional money would remain locally. “I think it’s important we control our destiny,” he said.
Dr. Dalton said the new BEP 2.0 formula adopted in 2007 will hurt local school systems when its fully implemented.
“The state has adopted a new formula that distributes money based on amount of income you have in property taxes and sales taxes. Communities like ours that have fairly good property tax bases and sales tax bases would receive less state money,” he said.
Dalton said the old BEP formula gave consideration to how much it cost to live in places that have property values that are higher. “That was an adjustment that equalized it. This new formula takes that out, which mean from now on, the state funding will go down as those things go up,” he said.
Even with the prospect of reduced state funding, local school systems want to continue improving. “We want to be very competitive and stay at the top of the list,” West said.
West said education in Blount County is important in both cities and the county. “We put a lot of tax dollars toward it. A lot of counties don’t have the tax base and the percentage of their tax base they put to education is lower. It’s of major importance in our community, and we need to keep it a high profile,” he said. “We’re asking for a county-wide referendum on Nov. 4 and let the voters decide.”
Group members will ask the city councils and county commission to endorse putting this on the ballot. “What we are initially asking for is for County Commission to vote to put the referendum on the November ballot. We hope they endorse the effort and what it means for the children, but basically, what we are asking is, let the citizens decide if this is the way they want to address some of the needs of education,” West said.
West said that if county commission puts the referendum on the ballot, it will a county-wide vote. Group members are publicizing this move in hopes of building support. “This is not a last-minute, sneaky thing. We want people to understand this, we want questions asked. I don’t think it’s going to be polarizing, just put it out there and let the people vote,” he said.
Copelan said for a household of four with an average income of $44,000 to $47,000, this comes out to 21 cents a day for the $7 million in return.
West said he was involved with the organization because he wanted good schools for his granddaughters. Good school systems also attract good companies. “When Denso built here, they also built in Cleveland. Ask them, and they’ll tell you the quality of their work force here is markedly different,” he said.
Copelan said the initiative wasn’t being made because of poor performing schools. West said the campaign was simply an effort to keep from becoming complacent in the commitment to good schools. “You can’t stand still,” he said. “We want opportunities for our kids and grandkids to grow up and stay here and to have good jobs. To do that, you need a good, educated workforce,” he said.
The group started with about three people who suggested others people because they have a passion for education. “We want to keep it broad enough to where this is not Steve’s or Mike’s project. This is people who care about the future of the education of children in Blount County,” West said. “It will be over after the election. This group will dissolve. There is no other purpose except to pass this referendum.”
The group has organized and on July 18 sent letters to all county commissioners outlining their plans. On July 22, during a previously scheduled principals meeting at the Blount County School Board, group members pitched their idea. Group members plan to make themselves available to speak with any group or civic organization regarding the initiative.
Copelan said a new website is being developed to inform voters at www.halfacent.org. The email address is email@example.com. The website will give individuals answers to questions about the initiative.
West said the City of Maryville discussed the measure six years ago and opted not to do it. “If we had done it then, that would have been $40 million to education since then,” he said. “In the next five years with growth, that’s almost another $40 million.”
When asked why the group was working to put the measure to a vote now even in the midst of an economic slowdown, West said it is because the need is now. Students need space now, schools and improvements must be made sooner rather than later, and those improvements have to be paid for one way or another.
The former mayor said that while this new sales tax wouldn’t be a guarantee against future property tax increases, it would generate significant funds apart from the property tax each year. The move is an alternative to raising property taxes for education, he said.
“If you’ve got $7 million a year coming in, that’s $7 million a year, you don’t have to raise through property taxes,” he said.
Dalton said the global economy is demanding more skilled and knowledgeable workers.
“I think the state of the economy -- with the wealth in this country being absorbed by other countries more and more -- the pressure is on our schools to produce even better stronger graduates,” he said. “In the next few years, in order to compete in the global economy, we have to have even better graduates. We can’t wait.”
West said companies looking to build and/or expand used to consider cost per square foot of construction as the most important factor in choosing new sites.
“Now it’s the availability of educated workforce,” he said.
When asked what assurances the voters would have that this would be additional money spent on education, West said the referendum will show commissioners the will of the people who are demanding that money be invested in education.
“The reason we’re building new buildings and remodeling existing ones is coming from the needs. The people are telling elected officials, we need this,” he said. “The accountability comes from the same people who will vote this in; people who are saying, ‘We’re telling you that we want this to go to education.’ ”
“To endorse this tax is to say we’re committed to investing this in our schools,” Dalton said.
West said the first half of local sales tax collected goes straight to schools, divided with cities and county based on average daily attendance at the school systems. According to the groups calculations, 8.8 percent of the revenue goes to Alcoa schools, 27.6 percent to Maryville and 63.7 percent to the county.
Dalton said that while some might expect more opposition from outside the cities, it’s people in those unincorporated areas who would benefit most since most shopping and sales tax are generated in the cities. “Those folks get more benefit than anybody. The highest benefit goes to those outside the city,” he said. “Folks out in the county have more to gain than anyone because the bulk of sales taxes are generated within the cities,” said Dalton.
West said the group wants voters to understand the needs at all three school systems. Each system has made commitments and those have to be paid for. “We’re committed to the students of Blount County and the cities,” he said.
West said often he hears people talk about the quality of life in Blount County. “Our quality of life is predicated on generation after generation of good schools and educated people,” he said. “Look at the people in our county and cities who’ve gone through the county and city school systems.”
West said the no local government or school system is driving the initiative. “This is people and expectations driven,” he said.
The former mayor said funding for the group has come from various donors in the community. “We’re out raising money. We’re going to try to raise money to publicize this and should any money be leftover in November, we’ll equally distribute to the three education foundations.”
In the budget right now, the group has raised approximately $15,000.
The group has registered with the Blount County Election Commission as a “single measure committee,” West said.
Language for the proposed referendum hasn’t been finalized. The measure would be a simple “Yes” or “No” vote, West said.
Copelan said if the community is able to solve educational issues through either funding or standards, other issues such as workforce development and crime are alleviated. “It all works together,” she said.
West said for those folks who are retired, single or don’t have children, there is a benefit for them in this move. “Those folks that come here or grow old here, have quality of health care, library, because we’re committed to education,” he said. “Why would people move here except for what we are and what we are is predicated on generations of education. I think that is it.”
West said families want to raise their children and have opportunities for them to work and live in this area after they finish school. “My granddaughters are seventh generation going through these schools. I hope they’ll stay and raise their kids here, and I think there are a lot of other people that feel that way,” he said. “It’s a tough economic time, but we’ve got to make long range decisions, and I think this is the time to do it.”
The group says they are always looking for others to want to join the efforts. Current members of Blount Countians for Educational Excellence are:
• Steve West
• Randy Massey
• Jerome Moon
• Monica Gawet
• Jeff McCall
• Herb Meyer
• Donna Alexander
• Shirley Carr-Clowney
• Barbara Jenkins
• Dr. Mike Dalton
• Galen Johnson
• Don Story