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Judge rules sales tax vote was illegal

POSTED: May 12, 2008 5:00 a.m.

By Jennifer Sami

Times regional staff

The latest round in the contentious legal battle over Forsyth County’s 1-cent sales tax went to the city of Cumming on Wednesday.

Visiting Superior Court Judge Hugh W. Stone’s ruling that the county deprived the city of an opportunity to best use its share of the tax collection essentially nullifies February’s referendum, which extended the penny tax another five years.

The city sued the county over the sixth round of the special purpose local option sales tax, or SPLOST VI, contending that the county needed to list what the tax would fund, including all eight of the city’s proposed projects.

Instead, the referendum directed the city’s $11.7 million share toward a municipal parking deck, which Stone found to be unfair.

Stone went on to say that the county’s failure to list projects on the ballot violated an obligation of the special-tax statute, which both sides cited in their arguments.

"The projects had to be identified and they weren’t," Stone said. "They were only identified when the county was faced with a lawsuit by the city, and then they didn’t get to it until 19 days before (the vote)."

Commissioner David Richard said Tuesday night that the county will appeal the matter directly to the Georgia Supreme Court, bypassing the Georgia Court of Appeals. The county will ask for an expedited trial in hopes the ruling will be overturned.

Barring a quick decision, however, the judge’s ruling Wednesday assures there will be a gap in the 1-cent sales tax.

The current tax, known as SPLOST V, will expire June 30. SPLOST VI, which passed with nearly 70 percent of the vote in February, would have begun July 1.

If the county loses the appeal, or the court denies it a speedy ruling, it could create a ripple effect, Richard said.

Either scenario would delay indefinitely plans for a massive, upscale, mixed-use development off McFarland Road in South Forsyth.

Road construction for the retail project was the county’s top sales tax priority, Richard said.

Another sales tax referendum could not be held until November, so it would be at least eight months before the project could begin.

Cumming Mayor H. Ford Gravitt was visibly excited with the ruling, as was the five-member City Council, all of whom attended the eight-hour hearing Wednesday.

"We hope we can reach an amicable conclusion that would be beneficial to the city and the county," Gravitt said after the hearing. "I think the judge was fair. He saw through this and saw that ... the city has certainly been mistreated in this, and we’ve said that all along."

The mood was much more solemn on the county side of the courtroom. Richard and fellow Commissioner Charles Laughinghouse attended the proceedings, along with County Manager Rhonda O’Connor.

The group met briefly after the ruling before Laughinghouse released a statement.

"I believe the judge’s ruling is an error, but the board of commissioners will abide by the decision until [we] can determine an appropriate course of action," he said.

Stone did not award the city the attorney fees it had sought.

Though he agreed both parties could have done a better job of communicating, the judge said he didn’t "find bad faith here."

"I just find stubbornness and that’s not a basis for awarding attorney fees," he said.

In addition, Stone ruled that the city’s share of the tax collection, a population-based 4.29 percent cut, was legal.



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