- Associated Press - Saturday, May 3, 2014

JACKSON, Tenn. (AP) - Madison County attorney Steve Maroney has gotten approval from commissioners to begin preparing a lawsuit against the City of Jackson over $3.3 million in unpaid liquor taxes.

The Jackson Sun (http://bit.ly/1kwCToY) reports the move is a reaction to a new state law that says cities would be responsible for only 15 years of back payments unless a lawsuit if filed by June 1.

“Basically what they’re saying is, ‘If you want to collect any of the past-due revenue that’s owed by the cities for the benefit of education prior to 1999, you have to file suit by June 1 or those claims are forever waived and forfeited,’” Maroney said. “No one likes litigation as a first resort, but the language of that legislation is such that the counties really have no choice if they intend to collect for pre-1999 sums. They’ve got to file that suit by June the 1st or they’re going to lose the right to those funds forever.”

He said if the county, which is the funding body for local schools, collected only that amount, it would reduce what the city owes by more than $1 million.

The liquor tax has created confusion across the state. At least 15 other cities also owe money to school districts. The Hamilton County Board of Education filed suit last month against the City of Chattanooga over more than $11 million in unpaid liquor taxes.

Jackson Mayor Jerry Gist said he’s been in talks with Jackson-Madison County Schools since the situation came to light last year to see how best to repay the funds.

“I was working on it with the school system,” Gist said. “That’s who we owe the money to. I didn’t include anybody else. I started with the superintendent, and I think I started in the right place.”

Maroney says that filing suit over the issue doesn’t mean negotiations over back payments will stop.

Gist said past voluntary contributions should be included in negotiations.

“We’re not going to argue the fact that we don’t owe them some money, because we do; everyone concedes that,” Gist said. “I would like to see the city taxpayers treated fairly in those negotiations, the fact that the city taxpayers have contributed millions of dollars to making our schools safe by providing school resource officers at our cost. I’d like to see them consider that.”

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Information from: The Jackson Sun, http://www.jacksonsun.com