Fulton County’s request to get 35% of the Local Option Sales Tax shared with 15 cities would have a significant impact on Sandy Springs if it was accepted, city spokesperson Dan Coffer said.
Approximately one-fourth of the General Fund for Sandy Springs comes from the LOST tax distribution, Coffer said. In 2020, the city’s LOST revenue was $25.3 million.
“It’s used for all our General Fund. Everything from fire department to police department, to our parks and recreation programs, to our ambulance response,” Coffer said.
Since Sandy Springs and other municipalities formed, the county’s share had dropped from 35% to its current share, which is just under 5%.
The LOST is a one-cent sales tax used to fund services such as fire, police, transportation, parks and recreation, and other local government services. The purpose of LOST is to provide equitable tax relief from Ad Valorem (property) taxes for all Fulton County taxpayers, Doug Eaves, the county’s consultant, said during the joint meeting of the Fulton County Commission and representatives of the 15 cities in the county on July 15.
Sandy Springs has received more than $251 million in the past years from LOST revenues out of the $2.38 million distributed to the 15 cities. During that same time, the county received more than $257 million.
“This is a surprising request because in 2012, the County agreed to a negotiated percentage of less than 15 percent,” the 15 cities said in a joint press release. “Since that time, the County’s service area has significantly shrunk from approximately 90 square miles to less than two square miles in which less than 1,000 residents live.”
Eaves said the current LOST revenue distribution relieves 33.3% of the municipal tax burden and only 1.9% of the county taxpayer burden. In 2000, the county received 35% of the LOST revenue. By 2012, the county’s share had been cut to 4.9% as more cities became incorporated, starting with Sandy Springs.
The drop was not negotiated after the 2010 Census, Eaves said. The General Assembly cut the county’s share down to 4.9%.
“The General Assembly illogically penalized the county by removing General Fund LOST proceeds from the county share used to provide mandated and discretionary countywide services and giving them to the new cities,” he said.
Cities provide essential services including police, fire, and sanitation to nearly all the residents of Fulton County, the cities’ release said. A $95 million shift in sales tax revenues would require raising property taxes on almost all Fulton County residents and businesses “at a time when they can least afford it,” the cities said.
But Eaves said their citizens are hurting because the county, another one of their partners, is hurting. He shared figures that said the county’s “fair share” should be 47% of LOST revenue, but told the city mayors the county was requesting a 35% share.
Eaves shared the county’s presentation that said Sandy Springs, the county’s second-largest city after Atlanta, received 9.5% of LOST revenue in 2020, or $25.3 million.
Fulton County discussed services it funds and other services the cities fund. Cities fund public safety. In Sandy Springs, the Police and Fire Departments account for the largest portion of the city budget, Coffer said.
“Even though Fulton County administers our election, we still have to pay them for that election 100%,” he said.
In 2021, Sandy Springs paid the county $226,067 for its election, which he said covered 100% of the costs.
“We have to pay them for animal control. It’s a service that they provide, but we have to pay for,” he said.
The cities will meet with the county on July 29 to begin talks using a negotiation team, Coffer said.
The 15 cities said in their release they are united in opposition to the county’s position but are willing to work toward a reasonable distribution of the sales tax. The cities will propose their own distribution figures at that meeting.
If after 60 days an agreement isn’t reached, it moves to arbitration. If no agreement is reached by Dec. 30, LOST expires, Coffer said.
Andy Welch, the representative of most of the cities except Sandy Springs, which is represented by City Attorney Dan Lee, had questions about the county’s expenditures. The 1.6 square miles of property that remains after the incorporation of cities is the only area where the county can provide police and fire services. The county did reduce police and fire expenditures. But at the same time, public safety administration increased to $32 million, he said.
Even with reductions, the county used more than $3 million for fire services. At the same time, the county has a contract with South Fulton to provide fire coverage for that unincorporated area of approximately $340,00 per year, Welch said.