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Fulton County and its 15 cities return to a second mediation session on Friday, Oct. 7, over the distribution of Local Option Sales Tax (LOST) revenue.
State law requires the county and cities to renegotiate the distribution of the sales tax revenue every 10 years. Those negotiations began on July 1 and moved into mediation when the two sides couldn’t reach an agreement.
The county has been offering proposals in the range of 15%. Some options had the county’s percentage start lower and increase to that amount, County Commissioner Bob Ellis told Reporter Newspapers.
In 2014 the county’s share of LOST was 14.97%. With the formation of the city of South Fulton in 2017, the county’s share was cut to 4.97%, he said.
Other options give the cities the same revenue they now receive with a county guarantee that it never goes down. The county LOST revenue would only increase through economic growth that increases sales taxes collected.
Negotiators for the cities rejected the county’s offers during the first mediation session on Sept. 23, saying that the county had yet to explain how it would use the additional revenue. State law specifies categories and services that can be used for LOST funds.
Ellis, who represents much of Sandy Springs as a Fulton County Commissioner, said residents need to understand that LOST is not a city or county-only sales tax. Its purpose is to provide tax relief to citizens by adding revenue to the city and county general funds to provide services.
The services provided countywide are different and separate from services that cities provide, such as police and fire, he said. The county services include administering the largest court system in the state, which has 61,000 open criminal cases. Or running the largest jail system in the southeast, which has seen a 41% increase in inmates.
“We’ve got overpopulation, we’re having to enter into outsourcing agreements. We’ve got a very aging facility that’s going to have to be replaced,” Ellis said.
Fulton County is trying to deliver mental health services across the county as well, he said.
The agreement is not about one side winning or losing, he said.
“It’s going to give both the cities and the county the best opportunity to hold their millage rates the same or be in a position to lower them as well as deliver the services that they’re entrusted to deliver,” Ellis said. “You don’t want it so tilted to one side or the other, that you’re going to have one party unduly benefit and having to go and either shortchange citizens on services or drastically or increase millage rates to try to fund.”
Taxpayers in the unincorporated part of the county pay a separate tax for services like those provided by the cities to their residents, he said.
Ellis said the cities with millage rate caps have other funding mechanisms, including TSPLOST – transportation special local option sales tax and hotel/motel taxes. But the county told the cities in mediation to show them what those cities would lose in revenue by being unable to raise millage rates to make up any reduced LOST revenue. The county would then make those cities “whole” from its LOST share. That was rejected.
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