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County mayor issues statement on City lawsuit

Council votes on declaratory judgement


Update-Friday, Feb. 9-

(February 9, 2024) – Bedford County Mayor Chad Graham has released the following statement:
“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.
“Education is a vital function of local government; it’s critical for economic development and quality of life. Shelbyville’s sales tax base is supported by shoppers from throughout the County, and Bedford County, unlike some of its neighbors, has one consolidated school system rather than separate city and county systems.
“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.”
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. The city is now seeking to end that agreement, which would return that revenue to the city’s budget going forward and force the county to restructure the way it funds school construction.

In September, Bedford County Board of Commissioners voted to hire the law firm Holland & Knight LLP to represent the county in discussions with the City of Shelbyville over the distribution of sales tax revenue.

Thursday night's meeting coverage

Shelbyville City Council has voted to authorize the City of Shelbyville’s legal counsel to take necessary action against Bedford County Government-- to seek a declaratory judgment that the 1974 Local Option Sales Tax Contract is terminated, effective July 1, 2024. Council members Henry Feldhaus,  Stephanie Isaacs and Gary Haile voted no.  The other three Council members voted yes, which resulted in a tie vote. Shelbyville Mayor Randy Carroll was required to cast the deciding vote, which was a yes. So the action then passed 4:3.

Shelbyville City Council