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Shelbyville City pursues suit against County Government

Posted on Wednesday, February 14, 2024 at 7:55 am


In 1974, the city and the county signed a contract under which the city voluntarily gave up its portion of a sales tax increase which was passed that year so that the money could be used for new school construction.

But now the city is seeking to end that agreement, which would redistribute nearly $2 million in revenue from the local option sales tax. This would return that revenue to the city’s budget going forward and force the county to restructure the way it funds school construction, according to a statement from Bedford County Government.

County Mayor Chad Graham released a statement on Friday, which said, “I am disappointed with Shelbyville City Council’s decision to take legal action against the county government, and the taxpayers who support it, regarding sales tax distribution for education. Bedford County continues to meet all the conditions from the 1974 agreement, which directs that 100 percent of those funds are to be used for education purposes only.”

In the statement, Graham explained Shelbyville’s sales tax base is supported by shoppers from throughout the county.

Bedford County also has one consolidated school system, unlike other counties. (For example, like Coffee County, which is separated into three school systems).

In the 1974 agreement, the city — which no longer wished to operate and manage their city schools — would voluntarily provide their portion of a sales tax increase to the county. This was authorized by public referendum.

The city’s share of sales tax proceeds were to be dedicated for public education and school construction debt. The county accepted their request and assumed responsibility for operating and maintaining the entire city school system and merged it with the county schools.

“Bedford County’s population has been growing and continues to grow rapidly, requiring new schools and expansion of existing schools. We must make sure every student, inside and outside city limits, can get an excellent education in a proper and secure environment,” said Graham Friday.

At their September2023 meeting, the Bedford County Board of Commissioners voted to retain the Nashville law firm Holland and Knight LLP in order to consult legal counsel.