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Cities want bigger cut of LOST revenue
Municipalities say Hall unwilling to negotiate so far
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City officials want to change the way local sales taxes are distributed in the county using a formula that would cut the county government's share by nearly 9 percent.

The local governments renegotiate how they share Local Option Sales Tax collections every 10 years, following the completion of the decennial census.

Until now, the money has been divided based on population. The current formula gives Hall County a little more than 75 percent of the monthly check from the state's Department of Revenue.

City officials, meeting Monday night at Jaemor Farms, discussed shifting the focus this year, divvying the money based on each government's property tax digest.

Their proposal would cut the county's share to a little less than 67 percent. Cities, from Braselton and Buford in the south end of the county to Clermont and Lula in the northern reaches, would see modest gains.

Unlike Special Purpose Local Option Sales Tax, which can only be used on voter-approved projects, LOST is a sales tax that local governments can use to pay for day-to-day operations, lessening their reliance on property taxes. Lula, Clermont and Gillsville have no property tax, largely because of LOST revenues.

Together, Hall's cities have hired Phil Sutton, the former assistant administrator for Hall County, as a consultant to lead them in the negotiations.

They say that, so far, the county has been unwilling to negotiate with them.

Hall County Commission Chairman Tom Oliver said the governments still have plenty of time "to work toward a solution here."

Most counties in Georgia with LOST have not begun to negotiate how it will be distributed; Sutton told city leaders at Tuesday's meeting of the Joint Municipal Association that seven counties are currently negotiating sales tax distribution.

Legally, they have until July 1 to call for the sales tax negotiations.

"I think there will be more and more coming week by week," Sutton said.

Sutton said some 90 percent of the counties in the state with LOST divvy it up based on population.

Legally, however, the governments can look at a number of factors, including property tax digests.

The cities want to look at changing the formula based on each government's tax digest. Sutton said the cities in Hall County host 75 percent of commercial development and 60 percent of industrial development.

"You can see by the statistics that the cities in this county are the real, are truly economic engines," said Sutton.

Lula City Manager Dennis Bergin said even under the current distribution formula the county "could lose millions."

Oliver said the county's case for a greater share of the tax will revolve around the fact that LOST revenues given to the county government are distributed among all the county's residents. The county uses some of its portion to fund the courts and the jail, Oliver said, two services that cities may use.

Jock Connell, the former interim administrator for the county, will likely serve as the lead consultant for the county government in the negotiations, Oliver said.

The chairman did not make an official comment on the cities' desire to distribute the tax based on the property tax digest, because he said he did not yet know the details.

If the governments cannot agree on how to divide the sales tax revenues after two months of negotiations, then a state law requires them to go into mediation for two months. If there is still no resolution after 120 days, a judge will be appointed to supervise the negotiations, picking either the county's or the cities' side.

Sutton said the court decision will be risky for either side.

"That's why it's really important, when you're talking about millions of dollars, that we be able to sit down and have some discussions about the formula as long as there is this willingness by all the cities to work through some of these issues," said Bergin. "It doesn't mean the pain's going to go away. It means it's all going to be predictable and we're going to understand the impact."

 

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