Tennessee lawmakers will consider options to restore real estate transfer tax revenues to local governments.
Speaker of the House Cameron Sexton is navigating ongoing legislative efforts to return these specific tax dollars to county levels following requests from Upper Cumberland mayors. The state previously utilized local funds from various departments to cover revenue shortfalls before shifting to current budgeting practices.
“Yeah, we’re hopeful we might can get that done this year,” Sexton said. “Look, I mean, if you want to go back 18 years ago before Republicans became in control in the state of Tennessee, the Democrat Party, they weren’t doing sound budgeting.”
Sexton said state officials previously utilized local revenues to cover shortfalls rather than reducing expenditures. Recent legislative sessions have focused on eliminating those accumulated debts, Sexton said.
“They were borrowing from the locals, whether it’s the road fund, whether it was the money at the clerk’s office, whether it was transfer stuff, whether it was state shared sales tax that they didn’t give back to the locals,” Sexton said. “Instead of making the hard decisions and balancing the budget and actually making cuts to survive, they just started taking money from various places and plugging the holes that they were having with bad revenue projections and other things to plug those holes.”
Upper Cumberland county mayors have asked for the return of the real estate transfer tax money to local governments. They argue they collect the revenues.
“Over the years we have tried to use sound budgeting, pay back those IOUs that we have done, which we have done,” Sexton said. “We’re hopeful that we can get to some agreement on the transfer real estate tax at some point here in the near future as whereas the state sales tax or state shared sales tax gap that’s currently there.”
Before the current budgeting strategies were implemented 18 years ago, local governments lost access to these transfer fees and shared sales taxes when the state redirected the funds. Returning the real estate transfer tax would restore a dedicated revenue stream directly to the counties.