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Editorial: Should Sullivan County have liquor by the drink?

Editorial Board • Feb 3, 2020 at 10:30 PM

Sullivan County stood by when Johnson City, Kingsport and Bristol approved liquor by the drink in the 1980s. It stood by for decades as alcohol tax dollars rolled into city coffers, even attempting a back-door snatch of some of that cash several years ago.

That having failed, at long last the county may set the stage for on-premise alcohol consumption outside the city limits, but it may be a tough sell for non-city residents.

Led by Johnson City, the cities’ saw a new era of development and a significant new revenue source when residents voted for liquor by the drink. Tennessee imposes a 15 percent tax on such sales, and the state keeps half, sending the other half back to the locality where that money is then split again with half going to the local school system.

Several years ago, Sullivan joined five other counties in suing for a cut of that money on the premise that they should get a share of that portion earmarked for school systems. The suit claimed the county was owed $750,000 from Bristol and about $1.2 million from Kingsport. The cities disputed the claims, arguing that the law allowed them to keep the tax proceeds for their own schools, not schools in areas that failed to approve liquor by the drink.

The trial courts reached varied results, some holding in favor of the counties and others for the cities. The cases were all appealed, and in four of them the Court of Appeals held in favor of the cities. In one case, however, a different panel of judges on the Court of Appeals held in favor of the county, and so last May the state Supreme Court settled the issue, siding with the cities.

Under a proposed resolution that will require a two-thirds vote on Feb. 21, county commissioners may place a liquor by the drink referendum on the county ballot in the Nov. 3 election. Sponsor Hershel Glover of Bluff City said it is time for Sullivan County to join in collecting alcohol taxes.

“We’re losing a lot of revenue,” Glover said.

Commissioner Dwight King of Piney Flats added that the District 5 area represented by him and Glover includes Boone Lake, South Holston Lake and the U.S. Highways 19E-11E intersection between Bristol, Tennessee, and Johnson City — areas Glover said are ripe for new hotels, restaurants and other businesses to generate jobs and tax revenues if liquor by the drink passes.

“We’ve got to find a way in Sullivan County to generate revenue,” Glover said.

King predicted a “major restaurant” for eastern Sullivan County and said the owner of Pardner’s Restaurant in Piney Flats would like to add alcohol, and he predicted a hotel that could cater to Bristol Motor Speedway visitors and fishing and boating enthusiasts on the two lakes.

If all goes as elected officials hope, county residents including those in the cities will decide the matter. Approval will be a step forward for rural business development and a badly needed revenue stream for the county, but will city residents vote to lose tax revenue to the county? And will more conservative rural residents support alcohol sales?

The arguments will be interesting, and the votes will be based largely either on territorial or moral standards. What say you, Sullivan County?

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