Pulaski County is suing the city of Radford over an agreement signed in 1978, which says Pulaski County will pay Radford part the tax revenue from sales made just outside the city limits.
The county wants to dissolve the agreement, which says they will pay Radford a portion of revenue sales in the Fairlawn community, a section of Pulaski County just across the New River from the city, where Kroger, McDonalds, Starbucks and other businesses are located.
The city of Charlottesville and Albemarle County also have a revenue sharing agreement.
At the core of the tension between Pulaski County and Radford are some of the laws that are unique to the Commonwealth.
Virginia has 38 independent cities that are separate from county governments—the only state in the country where this is widespread.
Virginia Tech Urban Planning associate professor David Bieri said this type of system really doesn’t reflect modern economic realities.
“We hang together economically, whether you live in Radford or work in Blacksburg or commute to Christiansburg to do your shopping,” Bieri said, pointing out that the U.S. Census recognizes the New River Valley area as a unified region, known as the Blacksburg-Christiansburg-Radford Metropolitan Statistical Area.
Bieri said he’s not surprised to see the agreement between Pulaski County and Radford unraveling. “Pulaski residents are giving up 28% of their sales tax revenues to Radford, with no control over what that money is used for,” Bieri said.
In hindsight, annexing Radford into the area that includes Fairlawn would have probably made more sense, said Bieri. But Virginia state law now bans cities from expanding into counties, even though towns can.
Consolidating city and county governments is another option. Nashville, Lexington, Kentucky and Indianapolis are some examples of cities that did this. A few places in Virginia have too, though Bieri said consolidation can be politically contentious.
A third solution is to establish more detailed revenue sharing agreements that give counties more direct say in how the money is spent.
