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Cumberland Center, sales tax back on agenda

By Sara McManamy-Johnson sjohnson@lebanondemocrat.com • Dec 17, 2015 at 5:59 PM

Lebanon City Council is again due to consider two key votes Tuesday.

Councilors were due Feb. 4 to vote on the proposed Cumberland Center Development District and a separate measure seeking a referendum for a sales tax increase, but both measures were delayed because the full council was not present.

Mayor Philip Craighead is trying again for the regularly scheduled meeting Tuesday at 6 p.m.

“Hopefully we’ll have everyone there and we can put this issue to rest,” said Craighead, speaking about the Cumberland Center Development District. “I'm looking forward to – hopefully – that it gets passed and we can start using it as a sales tool to attract new businesses.”

The measure would establish a Cumberland Center Development District of about 257 acres and would create a fund for the future development of a multipurpose event center at the heart of the district.

According to Craighead, a private developer owning about 165 acres of the district would hand over title to 20 acres for the city to build the event center in exchange for the city adding infrastructure to the property.

Craighead is also proposing to set aside sales tax revenues generated within the district to fund its future development.

As part of the plan, the city would seek a collaboration with Wilson County and Wilson County Schools for each entity to contribute their portion of sales tax dollars from within the district.

Both Wilson County and Wilson County Schools officials have been noncommittal on whether they would participate, and County Mayor Randall Hutto said the city would have to take the lead before the county committed one way or another.

Councilors have already approved the measure on first reading and were due to consider it on second reading Dec. 3, but they instead voted to delay it until city officials could discuss it with county officials.

Councilors were again due to consider it on Jan. 21, but the full council was not present.

Also on Tuesday, councilors are due to consider whether to ask voters for a half-percent increase on the city’s local option sales tax, raising the rate from 2.25 percent to 2.75 percent.

State law allows municipalities to set location option sales tax rates up to 2.75 percent on the first $1,600 of any single piece of personal property.

The ordinance would allow the city to place the question on the ballot in a special election.

City council was due to consider the measure during its Jan. 7 meeting, but city officials postponed it after discussions between City Attorney Andy Wright and state election officials revealed concerns from the state election officials.

The original version of the ordinance included wording that could link passage of the sales tax to a reduction of property taxes.

“They are of the position that incorporating any reference to a property tax into the ballot questions would be confusing to voters and possibly subject the referendum to a successful legal challenge,” said Wright in an email at the time.

He said they also believed the wording of it could violate the city’s charter since the charter vests city council with sole authority for setting property tax rates. 

The new ordinance strips any reference to property tax rates, but Craighead said passage of the sales tax increase could lead to a reduction in property tax rates.

“The main idea of this is if we increase the half-cent sales tax, then we’re looking at probably about a 30 percent reduction in our city of Lebanon property tax, which should equal around 18 cents,” said Craighead.

He estimated the sales tax increase could generate about $4 million in its first year, based on current sales tax revenues.

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