The members of the Eatonton City Council and Putnam County Board of Commissioners met together again last week to wrestle over the split of local option sales tax (LOST) revenues for the next 10 years.
They listened to presentations from each side’s consultant for an hour, huddled in separate rooms for another four hours – and, on the city’s request, ultimately decided to come back in 30 days to try again.
Despite the apparent stalemate, several new twists emerged from the session.
Perhaps the main one came from the county’s specifically-stated willingness to kill the whole deal if it does not get a satisfactory increase in its share of the revenues. Under state law, the tax would end after Dec. 31 if a county and its municipalities have not negotiated a formula to split the revenues. Also, the parties no longer have the option of going to court to make the judge decide, not even under the “baseball arbitration” rule of picking one side’s argument as was used in the 2012 negotiations. The county currently receives 69 percent of the LOST revenues and is asking for 80 percent.
Part of this hardnosed approach comes from the county’s frustration with the city not stating a position in earlier sessions, other than any change in the formula being “too painful.”
Another part would be the much larger county government being able to absorb the loss more easily, with much less impact on the county’s millage rate than on the city’s. The county’s general fund is about three times that of the city’s.
However, for this month’s session, the city hired its own consultant, Phil Sutton of Sutton Consulting, who provided the rationale for the city asking for a slight increase in its share, from 31 percent to 34 percent.
With the court system out of the picture and with a deadline looming, both sides jointly hired a mediator, Athens attorney Denny Galis, who for the past 25 years has specialized in mediation and arbitration cases.
He earlier served as the Athens city attorney and then the first county attorney for the consolidated Athens-Clarke government.
The county’s consultant is Dan Eaves of the Eaves Consulting Group.
Set in motion in the late 1970s, the local option sales tax was aimed as a way to provide property tax relief. Unless voided by the failure of negotiations on the revenue split, the LOST is a permanent tax. Many, if not virtually all, Georgia counties and their municipalities now also have special purpose local option sales taxes (SPLOST) for capital projects, for public education, and, most recently, transportation projects. However, SPLOST taxes carry time limitations.