Commissioners head to mediation over sales tax disagreement

by: Mike Petchenik Updated:

NORTH FULTON COUNTY, Ga. - A battle over how to divide millions of sales tax dollars in Fulton County is heading to mediation.

Fulton County has been negotiating with the 14 cities in its borders for each government’s respective piece of $220 million in Local Option Sales Tax (LOST) revenues generated every time someone makes a purchase anywhere in the county. 

But, after all sides failed to reach an agreement, County Commission Chairman John Eaves told Channel 2’s Mike Petchenik the decision was made to bring in outside help.

“I see a positive step in the right direction calling in a mediator to help to facilitate the conversation,” Eaves told Petchenik Wednesday.

Eaves could not say how much money the mediator would cost, but he said the 15 governments involved had agreed to split the cost.  He wouldn’t name the mediator selected, but said it was a local judge with experience on issues such as this.

Currently, the city of Atlanta receives the lion's share of the money at about $8.9 million a month. Fulton County government receives about $3 million a month, and Sandy Springs a little more than $1 million. 

Negotiators must consider population, where sales taxes are generated, and the number of services a government provides to its residents, when they decide how to allocate the money.

Eaves told Petchenik he believes Fulton County should continue to receive the same amount, if not more, than it currently receives because it’s providing services county-wide, including public health, libraries and criminal justice.

“The fact remains the county still provides county-wide services whether you’re in the city or an unincorporated area,” said Eaves.  “Resources are needed to sustain the level of services that we provide.”

Since the last negotiation, however, several new cities have incorporated, and their respective mayors are fighting for a larger portion of the LOST revenues because of the services the new cities, including Sandy Springs, Johns Creek and Milton, are now providing residents.

North Fulton Commissioner Liz Hausmann told Petchenik she believes the negotiation should strongly consider population as a factor, but she also said the county relies on the revenue to provide its services.

“The county does depend on a portion of that money for our general fund, as currently set up, so if we don’t get most of that money that would put our financial straits that we are in, in a worse position.”

Fulton County Taxpayer’s Foundation Director Barbara Payne told Petchenik she believes Fulton County is likely getting too much money for the services it does provide because some are duplicated at the city level.

“I totally understand why the cities are in an uproar about this,” she said.  “There’s too much redundancy.  Let’s look at the line items that need to be eliminated so we can free up that money, so maybe a bigger percentage can go to these municipalities that they’re not expecting.”

All sides have until November 1 to reach an agreement with the mediator.  If that doesn’t happen, the issue moves into “baseball arbitration,” with a superior court judge presiding over the case. 

If that isn’t successful, the Department of Revenue would continue the allocation at the current rate until an agreement is reached.



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