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Hall officials pleased with sales tax decision
Ga. Attorney General says state owes local governments $18 million
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Local officials were delighted to hear additional sales tax money may be coming their way.

Attorney General Thurbert Baker said Wednesday the state must hand over $18 million in disputed sales tax revenue to local governments, adding another blow to the state’s financial struggles. “I think it was a fair and proper decision,” said Assistant Hall County Administrator Phil Sutton. “It was always the counties’ money.”

Sutton estimates Hall County could receive between $350,000 and $600,000 of the sales tax revenue.

Melody Marlowe, Gainesville’s administrative services director, said the opinion could mean that tens of thousands of dollars would be returned to the city.

“It would come at a good time,” said Marlowe, who is currently working on the city’s spending plan for fiscal year 2011.

“Every little bit helps in this economy,” said Gainesville Manager Kip Padgett.

A spokesman for Gov. Sonny Perdue was critical of the opinion and said Wednesday the office was analyzing the decision. He declined to say whether the state would comply.

Georgia’s top attorney delivered the 15-page opinion to Lt. Gov. Casey Cagle, who asked the attorney general last July for guidance on what do with an unidentifiable pot of sales tax dollars to prepare for budget discussions, said Cagle spokeswoman Jaillene Hunter.

At issue are sales taxes collected by the state without clear information about which local government they belong to. Typically, Georgia collects sales taxes from merchants and then distributes a portion back to the appropriate local government. But some of the sales taxes arrive in state coffers without the necessary distribution information.

Under state law, the revenue commissioner divvies up those “unidentifiable” funds between local governments.

Sutton said Hall County typically received such a payment every three months.

In 2008, however, the state law giving state revenue Commissioner Bart Graham that authority expired. When the law was enacted again in May 2009, it was unclear what should become of the roughly $18 million in “unidentifiable” sales tax revenues that had accumulated during the 16-month gap.

“The counties’ opinion, of course, was that it was rightfully the counties’, and it should be divvied up on a pro rata basis,” Sutton said. “We knew all along because of the way they’ve always distributed it.”

But Perdue spokesman Bert Brantley suggested the law was clear. Lawmakers could have made the law retroactive “and chose not to do that,” he said.

The decision comes as the state is scrambling to fill what is shaping up as another $1 billion shortfall for the fiscal year that begins July 1. This week state money managers reported that tax collections are down for the 15th straight month.

County governments likewise have been hit hard by the economic downturn.

“It’s one of the things we’ve been talking to our legislative delegation about for the last several months. They’ve finally done the right thing, so hopefully we’ll get that money soon,” Sutton said. “That’ll be a help. We’re real pleased with that.”

Times reporter Ashley Fielding and The Associated Press contributed to this report.

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