How Hall County and its municipalities share local sales tax could be determined in the county’s Superior Court.
In August, local option sales tax revenue-sharing negotiations between leaders in Hall County failed, with the county and its cities unable to agree on a way to split sales tax profits.
Hall County wants to keep about 75 percent of that revenue — nearly the same as the current agreement.
The cities proposed the county’s portion should be around 58 percent, allowing the municipalities more of the revenues, something, they said, is owed to them under the formula.
Last week, those talks went through a mediation process, as permitted by law, but ended abruptly last Tuesday afternoon.
The next step, if an agreement cannot be made, would be arbitration in the court system.
“As defined by legislation, each party would each make their best argument and submit that to the judge for his review, acknowledgement and a final outcome,” said Dennis Bergin, Lula city manager.
The arbitration process is known as “baseball arbitration” where both parties — the county and the cities — present their “best and final” offer. The judge will choose between the offers and the decision is final.
“The county and cities will make an offer and the judge chooses between the two and not make changes to either one of them,” said Bergin. “So, you either hit one out of the park or you’re out.”
Either party has 30 days to file for arbitration. Once arbitration is filed for, the court will likely appoint a judge outside of Hall County’s district to head the process.
County and city officials said attorneys for both sides have begun discussions on filing for arbitration jointly.
“I think there was an agreement that the attorneys could work collaboratively on the arbitration filing,” said Randy Knighton, Hall County administrator. “I do want to again emphasize that that is just a matter of preparation in case it does go into arbitration.” Knighton said he is “hopeful” an agreement will be reached within the 30 days so the negotiations do not have to go through the arbitration process.
“We have different parties involved and while I remain hopeful we can reach an agreement, but we will see where it goes,” he said.
But if independent negotiations cannot reach an agreement and the talks do go into arbitration before the end of November, it could take some time before the case is heard by an outside judge.
“What we’ve found in other communities is obtaining a judge outside their district, depending on their workload, is not as easy as one might think,” said Bergin.
If a decision is not reached by the end of the year, the Georgia Department of Revenue will continue to distribute funds under the current agreement until arbitration is complete.
“There’s a risk involved for all the parties based on their arguments,” said Bergin. “But we hope in the interim that there will still be an opportunity to negotiate an agreement prior to arbitration.”
Arbitration, as of now, has not been filed for as both sides continue discussions independently.