Annexation, lodging tax among topics as city leaders meet with legislators


Story and photos by Jeff Keeling

It hasn’t been a late December tradition, but it may become one.

Johnson City Mayor Ralph Van Brocklin.

Johnson City Mayor Ralph Van Brocklin.


Johnson City commissioners and state lawmakers Monday discussed local issues with state legislative implications, some controversial, just days before legislators head to Nashville for Tennessee’s 109th General Assembly. The 90-minute session, which Johnson City Mayor Ralph Van Brocklin said early on was, “about how we do what we do for citizens in the most cost-effective manner,” left local legislators and Johnson City officials feeling satisfied.

“I’m very pleased,” Banyas said after State Senator Rusty Crowe and representatives Matthew Hill and Micah Van Huss discussed everything from school funding and new annexation laws to lodging taxes with Banyas, three other commissioners and several school board members. “We haven’t typically done something like this with our representatives before they go into session. We appreciate it.”

Hill returned the compliment. “From meeting standards, this has been one of the more productive ones I’ve been a part of because we talked about real things,” Hill said. “This is one of the first ones I’ve been in where there’s been that much detail, which is great.”

Those details began with a lengthy discussion about Johnson City’s desire to increase its hotel-motel tax from the current 5 percent to 7 percent, putting about $450,000 more a year in city coffers. Since Johnson City is one of 13 “home rule” cities in Tennessee, the authority to raise that tax rate must come through a legislative bill that would allow the same rate cap in all home rule cities – a lesson city leaders learned the hard way last year, when they were unable to gain approval.

Crowe and Hill reckoned the chances were better this year, but Hill was plain: get the backing of other home rule city representatives; be clear that the bill is not a tax increase but rather gives localities the ability to increase rates locally; and insure that the local government and not a private entity administers the funds.

State Rep. Matthew Hill.

State Rep. Matthew Hill.

Crowe added that specifying what the money would fund could help, and urged Johnson City leaders to get with other home rule cities immediately and begin gathering support.

“The answer is ‘maybe,’ which is better than last year,” Hill said of the effort’s chances.

The conversation then turned to annexation. A bill passed last year, co-sponsored by Van Huss and opposed by many cities, including Johnson City, has been vetted by the Tennessee Advisory Commission on Intergovernmental Regulations (TACIR). Monday, Mayor Ralph Van Brocklin led a discussion, partly based on TACIR’s report, about unintended consequences related to the bill and several elements the city would like to see changed.

Foremost among these is the issue of city-owned property not currently within city limits and currently not eligible for annexation. In Johnson City, that includes the Keefauver Farm near Gray, which the city purchased several years ago in hopes of eventually establishing a city park there.

Because the land is not contiguous to the current city limits, it doesn’t qualify for annexation under the law, Public Chapter 707, which strengthened a 2013 annexation moratorium led by Hamilton County Rep. Mike Carter. Hill said he would be comfortable with an amendment allowing for annexations of city-owned but non-contiguous property, if the property already was owned by a city prior to the passage of the stricter annexation laws.

From there, discussion turned to other non-contiguous property, including commercial/industrial and residential. Even if an owner requests it, property not contiguous to current city boundaries cannot be annexed without additional referendum involving all property owners between city limits and the proposed annexation area. Banyas brought up the city’s previous plans to extend city water and sewer services out near Keefauver Farm for planned subdivisions, the developers of which wanted to be annexed. If it remains unannexed and the homes must use septic systems, fewer will be able to be constructed.

State Senator Rusty Crowe.

State Senator Rusty Crowe.

Hill wasn’t as warm to that argument as he was to one put by Van Brocklin. In similar situations but when the land is slated for commercial or industrial development, Van Brocklin argued that the inability for the landowner to successfully request annexation could be a dealbreaker. Often, Van Brocklin said, industrial developers want city fire protection and other municipal services extended to land they wish to develop. “Preventing that could cause them to choose another location outside the county or even the state, and that is a huge job growth and economic development issue,” Van Brocklin said.

Hill said Rep. Carter is closely watching any prospective changes to the legislation, and Crowe said he believed lawmakers probably would consider at most one bill encompassing any number of tweaks to the annexation law.

“That bill will need to be very tightly written or you won’t get any votes for it,” Hill said.

He added that hearing from city leaders about annexation specifics, “is so vitally important. That way we know where the land mines are, so to speak, because we don’t want to purposefully blow anything up.”

Van Brocklin took responsibility for the city’s leaders not having communicated enough with legislators in the runup to the 2014 annexation bill. “I hope this discussion does facilitate assimilating those sorts of things as we move forward. It’s good for all of us.”

The group also covered a state education funding law with a loophole allowing counties to fund “one-time” school expenses without providing the normal share that goes to city systems within the same county. School board chair Kathy Hall said this had affected the Johnson City Schools in several instances where the county had provided funding to the county schools.

Normally, school funding in Washington County is subject to a proportional split with the city system. Currently that is about 56 percent for the county and 44 percent for the city. This helps insure that city taxpayers, who also pay county taxes, get a proportionate share of county education allocations.

Hall said she believes the law, Public Law 305, was meant to cover one-time crises but is open to misuse.

“I wouldn’t put it past some counties to find ‘one-time needs’ every year,” she said. “I don’t want to make this about us versus Washington County, but the point is, it’s a loophole to get around apportionment.”

Some other stances discussed with or delivered in writing to the lawmakers included:

  • A plea for help to get a more equal share of state economic development incentives directed toward Northeast Tennessee job-creating projects.
  • Support for the prospect of increasing historic preservation tax credits for downtown and urban core revitalization.
  • Advocacy of an increase to the state’s gasoline tax to help fund infrastructure needs.
  • Additional new revenue options beyond the hotel-motel tax, including local gross receipts taxes, continuance of the Hall Income Tax rate, and lifting of the single-article sales tax cap on certain large-ticket and luxury items.
  • Support for additional commitment to higher education funding “ahead of further tax cuts.”



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