Rutherford County Schools officials said that it is too soon to know the exact impact of a Tennessee Supreme Court ruling on the way that cities and counties share revenue from a 15 percent tax on liquor-by-the-drink.
The matter came up during discussion of the proposed 2019 budget in a Rutherford County Board of Education meeting last Monday.
The board learned of the tax issue during a budget presentation.
Superintendent Bill Spurlock was reading from the county’s estimated 2019 assessments of property tax valuations. Each penny from the property tax creates $794,071 for schools and $933,651 for the rest of the county budget, he said. Using that number, revenues were up $500,000, with $150,000 being interest.
Then, Jeff Sandvig, assistant superintendent for budget and finance, said much of the school board’s projected increased revenue gains could be wiped out by a recent Supreme Court ruling on liquor-by-the-drink taxes.
Board member Lisa Moore asked Sandvig how much that could impact Rutherford County Schools.
Sandvig replied, “I had 490 ($490,000) in the budget … for next year. I’ll just change it to zero.”
The tax ruling wiped out the district’s gain from the increase in the penny, he told the board.
He later told The Murfreesboro Post that he was trying to calculate the exact impact.
The Tennessee Supreme Court announced on May 8 that in five separate lawsuits, it ruled that cities with their own school systems are not required to share with counties the tax proceeds the cities receive from the sale of liquor for on-premises consumption, called “liquor-by-the-drink.”
Murfreesboro operates its own school district. A Murfreesboro city spokesman said that the city has always shared that revenue with the county, but he was waiting to hear back from the city’s legal department.