North Fulton County cities claim they’re losing thousands of dollars a day because of a yearlong squabble over local option sales tax money.
Local governments use that money — about $225 million a year countywide — to offset property taxes, hire police, pave roads, just about anything involved in operations.
Talks between the county and its 14 cities over how to divide the LOST money began last summer but have stalled past the point of mediation. They have now moved into “baseball arbitration,” where a judge will decide among the “best last offers.”
But that’s not likely to happen anytime soon because the cities, themselves, cannot formulate a best last offer they can all agree on.
The northern cities say Fulton had no incentive to negotiate a new split because it would likely mean less money for the county. Fulton says it provides a multitude of countywide services and is entitled to more than a simple share based on its unincorporated population.
LOST revenue is distributed according to a formula negotiated every 10 years between the county and its cities. Under the current arrangement struck in 2002 and adjusted as new cities sprang up, Fulton gets about 15 percent of the cut. The cities divide the rest based on population.
Right now, Roswell gets roughly $21 million a year in LOST distributions. Under a new formula based solely on current population, it would get about $2 million more.
“Every day, we’re losing money. … It’s enough to worry about,” Roswell Mayor Jere Wood said. “We could do wonderful things with that money.”
Johns Creek Mayor Mike Bodker said there’s a high likelihood Fulton would receive a smaller share under a new formula, based simply on updated census figures and the fact that four new cities have formed since the last negotiations. Right now, Fulton’s 15 percent cut brings in roughly $35 million a year.
But Fulton is not the only entity standing in the way of a settlement.
The problem, Wood said, has been assembling a position that supports a majority of the cities.
The six north Fulton cities, as well as Fairburn, Palmetto and Union City in the south, could expect more money with a revised formula based on population. Atlanta, Chattahoochee Hills, College Park, East Point and Hapeville — many of them desperate for cash — would see less or no increase at all.
East Point has not only seen a population decline since 2000, its tax base has dropped more than 30 percent in recent years.
Nevertheless, Mayor Earnestine Pittman said she’s hopeful her city won’t lose too much of the roughly $10 million it now receives annually in sales tax distribution.
“We’re keeping our fingers, toes and everything else crossed,” she said.
Population is only one factor used to determine distribution, but it does carry a lot of weight. By law, it is a default standard if other factors, such as the point where sales taxes are collected and need, cannot be agreed upon.
Right now, the cities have split into different camps.
Eleven cities have hired attorney Andrew Welch to represent their interests. Atlanta has hired it’s own attorney, and East Point and Fairburn are going it alone.
Welch said a situation with 14 different cities with 14 different perspectives complicates the issue. Nevertheless, he said, it’s to everyone’s benefit to continue to talk collectively.
“I think everyone should keep that door to negotiation open and pursue it in a good-faith manner,” he said.
The talks have been so fractured that two cases for arbitration have been filed.
Cobb County Senior Judge Grant Brantley confirmed Wednesday that he has been assigned both cases and will likely have them consolidated. After conferring with the attorneys, he plans to set a hearing date.
“Sometimes,” he said, “a firm hearing date is the best catalyst to get people talking to each other.”