City of Jackson Owes School System Millions of Dollars
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JACKSON, Tenn.- The city of Jackson could be forced to cut workers after a tax mix up that could cost the city millions of dollars. It is all over more than two decades of confusion about a “liquor by the drink” tax. Now, Madison County is suing Jackson for money that was supposed to go to the Jackson-Madison County School System. Jackson Mayor Jerry Gist said the city has not paid JMCSS in 22 years, adding up to more than $3 million. Jackson is one of more than 40 Tennessee cities in the same situation. “[There were] 42 cities across the state that did not realize they even owe the tax; we’re one of them,” Mayor Jerry Gist said. Mayor Gist said they did not know of the oversight until January. After 22 years, County Mayor Jimmy Harris said it is time for the city to pay up. “Since 1992, our school system should have received half of that mixed drink tax,” Mayor Harris said. According to state law, half of the liquor tax goes to the state and a fourth goes to the city where it was purchased. The remaining fourth is paid to the respective school system. But new legislation said the city of Jackson will only have to back pay 15 years. This week, county commissioners voted to file a lawsuit to get all tax money they have missed over the 22 years. “The school system would not receive those 7 years between ’92 and ’99, which amounts to somewhere around $1.1 to $1.2 million in taxes,” County Mayor Harris said. “Obviously we’d like to pay the least amount we have to, but if we need to go to court for school system to get the full payment then we will,” Jackson Mayor Gist said. Mayor Gist said he may have to cut city jobs to pay back the school system. “We’re going to have to tweak our budget this year, it may mean some reduction in force as far as temporary employees, part time employees. We’re going to try to do everything we can to hang on to full time employees,” Mayor Gist said. But County Mayor Harris said it is a necessary sacrifice. “We have to try to continue to improve our schools to bring them up to the standards we all expect in our community,” Mayor Harris explained. After the lawsuit is filed, Mayor Gist said the county and city will go to chancery court in Davidson County.
