Mineral Tax Crumbles in Full Commission

The Jefferson County Commission declined to approved a proposed mineral tax in a Special Session this week, which will impact the Budget Committee’s decision to include the proceeds from the proposed tax to balance the 2015-2016 budget. Late last month, the Budget Committee moved to use an anticipated three quarters of a million dollars that they projected would be brought in from a mineral tax, coupled with $600,000 in hospital lease money and across the board 3% cuts to all County departments, to balance the County side of the budget. Estimation used by the Budget Committee of around 8 to 10 million tons of taxable product were found to be highly overstated as information became available and several members of the full body expressed concern that an already shaky mining industry could lay off employees or fold under the additional pressure of the proposed tax. Budget Committee Chair Scarlett cautioned Commissioners against using an uncertain revenue source to balance the budget and Finance Chair McGraw concurred with the Budget Chair on the risk of using unknown numbers.

Commissioners Tucker and Beeler noted that, with a deficit riding over $2 million dollars, even a lesser amount of revenue that could be derived from the mineral tax would be welcome. However, County Attorney Churchwell informed the Commission that there was no sure way to know when the County would see revenue off of the proposed tax, as it is reported by the company, handled by the State of Tennessee and the current stockpile, the amount of which was unknown and nontaxable, must be sold off first. Also of concern was the actual product that is allowed to be taxed, with much of the minerals mined being exclude, as well as product that is sold out of State. Commissioner Douglas stated that the decision of the Commission to extend their first retail tax abatement is at odds with levying a new tax on an existing business. He also pointed out that all the proceeds from a mineral tax are mandated to go to funding roads.

At the recommendation of the Budget Committee ( 6-4) Budget Committee Chairman Scarlett moved the mineral tax for consideration of the full body, which would require two thirds of the Commission approval for passage. The recommendation failed in a 10-8 voted with Commissioners Huffaker, Douglas, McGraw, Seals, Scarlett, Dockery, Carmichael and Seal voting No. ( Commissioners Gaut, Solomon and Tabor were absent)

In other action, the Commission Approved $16,076 in proceeds from scrap metal going into fund 186 for use at Building 8 only.