The Town of Greeneville will seek legal counsel in its bid to obtain $2.84 million officials believe Greene County should share with the city school system.
On Tuesday, the Greeneville Board of Mayor and Aldermen approved a motion to authorize the city administrator to retain legal counsel to obtain the money.
The move is another step in response to a 16-cent increase in the county property tax rate for those who own land inside the Greeneville corporate limit.
In June, the Greene County Commission approved a single tax rate of $2.0145 per $100 of assessed value for the next fiscal year for both property inside and outside the Greeneville corporate limits.
That was a change from several decades of two separate county property tax rates, one for county residents and one of a lesser amount for those inside the Greeneville corporate limits. The difference came from a portion of the property tax allocated for education debt service for the Greene County Schools. The amount for that payment was not levied against Greeneville landowners because the town operated its own school system.
On July 1, the town submitted an invoice for $2.84 million to Greene County’s government for what town officials believe is the share of the current amount of the county schools’ education debt service that should be paid to the Greeneville schools, according to state law.
As is typical, the invoice said the county had 30 days to make its payment, City Administrator Todd Smith told the board. But no payment came by the end of July.
“I called the county mayor (Kevin Morrison) at the end of last week, and he indicated that it was not the county’s intention to pay the bill,” he said. “They disagree with the interpretation of the law that the Greeneville School System is owed a share.”
The next step for the town would be investigating its legal options to obtain the share of the debt service, Smith said. “I would recommend that the town not leave the $2.84 million on the table,” he said. “The city taxpayers should expect those funds to come to the school system.”
Mayor W.T. Daniels agreed. “The property tax increase was a total surprise for me, the board and the residents of Greeneville,” he said. “We need to keep asking for the funds and to obtain legal counsel for the purpose of determining the next right step.”
Alderman Jeff Taylor said several people have approached him, both Greeneville and Greene County residents, questioning the tax increase.
The increase came with no prior conversation with Greeneville officials, when there had been a precedent of the two separate property tax rates for many years. “It was poor business on their part, and the city citizens should have been given time to prepare,” Taylor said.
Alderman Keith Paxton said the tax increase is significant for taxpayers inside the town, particularly those living on a fixed income.
Town attorney Ron Woods explained to the board that while there may have been an agreement between county and town leaders in the past regarding the property tax, state law ultimately dictates how tax revenue can be used for school operations and debt.
The Tennessee Code Annotated regulates how taxes are shared between separate municipal or special school districts and a county system, he said.
State law also addresses debt that incurred for capital projects or other school improvements, Woods said.
According to state statute, a county taking out a bond for a school project has two options: It can borrow enough money to give a municipal school system within its border its share based on average daily attendance, or it can borrow only the funds needed for the project and only charge county property taxpayers for its repayment.
Greene County has chosen the latter in the past. “What they are doing is changing horses in the middle of the stream, and that is not advisable,” Woods said. This year’s county budget designates school debt service payments via sales tax revenue, which is also allowed by state law.
With the single tax rate, Woods said he thinks the county now has to share a portion of the existing county debt service with the Greeneville school system, based on the average daily attendance.
The current outstanding Greene County School System debt service is $8.8 million. Town officials calculated the $2.84 million invoice by multiplying the total debt by the Greeneville School System’s average student daily attendance percentage of .323.
The county has a different interpretation of the situation and has given four reasons why it believes it does not owe the Greeneville School System, Woods said.
Those include that the University of Tennessee’s County Technical Advisory Service gave positive counsel for the move, the state auditor approved the action, the county’s budget was approved by the state Comptroller’s Office and Sullivan County is doing the same thing, he continued.
Woods said he checked each of the those reasons and found that none held up to scrutiny.
Sullivan County has shared its bond funding with the Kingsport, Bristol and Johnson City school systems, he said. In talking to the State Comptroller Office, where the auditor’s office is also located, he was told that approval had not been given to the county budget or actions regarding the tax situation.
Woods said he had talked to CTAS legal counsel, and they agreed with the advice the town had received from UT’s Municipal Technical Advisory Service, that the debt service had to be shared with the approval of the single tax rate.
The county’s options are to pay its share of the debt service as requested by the town or change the tax rate back to two separate rates, Woods said. According to state statute, county and municipal governments can change an approved tax rate but must do it by the first Monday of October.
The court-ordered release of a major database detailing the staggering quantity of opioid pills distributed by pharmaceutical companies in Northeast Tennessee lends weight to allegations in the ongoing series of pending “Baby Doe” lawsuits naming manufacturers of the addictive drugs.
A restriction on publication of data from the Automation of Reports and Consolidated Orders System, known as ARCOS, was lifted in July by Ohio-based U.S. District Judge Dan A. Polster, in connection with multi-district lawsuits such as the one filed in 2017 by prosecutors in the 1st, 2nd and 3rd judicial districts.
Plaintiffs in the litigation include District Attorney General Dan E. Armstrong of the 3rd Judicial District, which includes Greene County.
The ARCOS database details the number of prescription pain pills distributed nationwide from 2006 to 2012. The numbers were broken down to the level of every county in the U.S. in a series of investigative articles in The Washington Post. They were further refined by a law firm in Nashville that represents plaintiffs in the local lawsuit and across Tennessee.
Branstetter, Stranch & Jennings “gleaned some points from the Washington Post data that are relevant to East Tennessee and the Sullivan Baby Doe suit,” said Sylvia Musgrove of The Corporate Image, a Bristol public relations firm that works with plaintiffs in the civil action. The lawsuits seek to stem the tide of opiate pills flowing into the region.
The numbers from the ARCOS database covering the years 2006-12 are eye-opening.
Figures show that there were nearly 30.2 million prescription pain pills distributed between 2006 and 2012 in Greene County. Figures for the same time frame for other counties in the 3rd Judicial District include Hamblen, 59.8 million; Hawkins, 23.1 million; and Hancock, 2.7 million.
Barry Staubus, district attorney general of the 1st Judicial District, called Sullivan County in his district “ground zero” at the time the lawsuit was filed in 2017. The numbers bear that out. According to ARCOS data, 108 million pain pills were distributed in Sullivan County between 2006 and 2012.
Washington County in the 1st Judicial District had 59.2 million pain pills distributed between 2006-2012, which parallels the amount in Hamblen County.
The regional total is 325.4 million pills between 2006-12.
That breaks down to an average of 64.5 pills supplied annually to each Greene County resident between 2006 and 2012.
Figures for the other 3rd Judicial District counties are Hamblen County, 138.3; Hawkins County, 58.6; and Hancock County, 56.4.
The regional average is 76.7 pills per resident.
Armstrong said last week the figures from the ARCOS database “will be most helpful in our lawsuit.”
“I believe the numbers indicate the pharmaceutical companies were well aware they were flooding the 3rd Judicial District with more pain medication than could be legitimately taken and had to know they were being diverted into the illegal drug market which has devastated our community,” he said.
Armstrong, Staubus of the 2nd Judicial District and the late Tony Clark of the 1st Judicial District, whose jurisdictions cover much of Northeast Tennessee, were the first in the state to file lawsuits against the pharmaceutical companies and other defendants.
Since the initial lawsuits in what is known as the “Sullivan Baby Doe” case were filed in June 2017, district attorneys general in more than 15 other Tennessee judicial districts have filed similar legal actions.
Local governments and the State of Tennessee have also filed lawsuits in the legal battle aimed at stemming the opioid addiction epidemic.
The lawsuit alleges Purdue Pharma L.P. and other manufacturers, the now-closed Center Pointe Medical Clinic in Kingsport and two private individuals convicted of pill sales all contribute to the opioid epidemic.
The fourth plaintiff, Baby Doe, through his Guardian Ad Litem, was born addicted to opiates in 2015 at Holston Valley Medical Center.
Opioid manufacturers named in the civil action include Purdue Pharma L.P. and related companies, Mallinckrodt, Endo and Teva Pharmaceuticals USA Inc.
Purdue Pharma and other pill-makers deny any wrongdoing.
The Nashville law firm of Branstetter, Stranch & Jennings PLLC, represents Tennessee attorneys general in the growing number of lawsuits.
J. Gerard Stranch, a managing partner of the law firm, has been active in the civil action since it was filed. Stranch has been nominated to be one of six attorneys who will oversee the negotiation class of the opioid multi-district litigation case in Ohio.
“The ARCOS data provides the clearest picture yet of the ways in which producers and distributors flooded our communities with prescription opioids,” he said last week. “It tells us that from 2006-2012, Tennessee had the fourth-highest number of opioids prescribed in the U.S. It shows that six of the counties included in our complaints ranked among the top 10 in Tennessee for the highest number of distributed pills.”
Stranch said data show that the number of prescription pain pills supplied to the 47 counties in the local lawsuits account for more than 77 percent of the pills prescribed in the entire state.
“This is clear confirmation of what we have said for years — that these companies willfully looked the other way while there were obvious signs of overprescription and diversion, and that they chose, time and again, to favor profits over people,” he said.
Six companies distributed 75 percent of the pills — oxycodone and hydrocodone — between 2006 an 2012: McKesson Corp., Walgreens, Cardinal Health, AmerisourceBergen, CVS and Walmart, according to The Washington Post analysis of the database.
Mallinckrodt Pharmaceuticals was the top opioid pill manufacturer nationwide from 2006 through 2012, making nearly 28.9 billion pills, according to the analysis.
The next motion date in the local Baby Doe lawsuit is scheduled for Aug. 13 in Circuit Court in Kingsport, before 2nd Judicial District Chancellor E.G. Moody.