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Wednesday, February 08, 2012

NF mayors want to stand together in sales tax negotiations.

By Joan Durbin and Angela Abbamonte; Neighbor Newspapers

The mayors of cities in north Fulton want to present a united front in negotiations with Fulton County on how sales tax revenues should be distributed. But consensus on their preferred methodology has yet to be reached.

On Feb. 1, the North Fulton Municipal Association held a special called meeting in Sandy Springs. Milton Mayor Joe Lockwood, the group’s chair, said the meeting was an executive session, preventing reporters from covering what was said behind closed doors.

Reached after the meeting, Roswell Mayor Jere Wood confirmed that the Local Option Sales Tax, or LOST, revenue was topic number one.

Every 10 years, the county and the cities revisit the formula used to distribute the LOST money, raised by a penny sales tax, among the various jurisdictions.

This is the year for a new agreement, which would take effect in 2013, and the mayors are hashing out their approach to negotiations. The current formula is based on population, but other factors can be considered, such as where the taxes were paid, how much debt a jurisdiction carries or the amount of services it provides.

The county is getting around 15 percent of the money now, but used to get a bigger cut before Milton, Sandy Springs and Johns Creek incorporated.

“The concern was now that Fulton County is getting such a small share there would be no incentive for them to enter into negotiations,” Wood said.

An attorney himself, the mayor said he has identified a clause in the state statute that would seem to address that possibility. In essence, he said, if a majority has signed on to an agreement, any party that hasn’t signed is entitles to a representational share based on population.

Wood said the mayors are getting opinions from their legal teams about this interpretation.

Sales tax revenues are extremely important to cities, Wood said. “Cities have become dependent on this. Property taxes would double if we didn’t receive this sales tax.”

Right now, Roswell has $19 million in LOST revenue in its current budget, but the city has gained some residents in the past 10 years.

“If it was a straight population split next year, it would be around $21 million,” Wood said.

Lockwood said the city of Milton would benefit from a population-based tax distribution, but they are not budgeting for that extra money just yet.

“It’s not like we’re loosing money if we don’t get it,” he said.

Lockwood said either a population-based or property value-based distribution would benefit Milton most. Distribution based on point of sale, however, would not be as good for the city.

If extra money does come through, he said it would be up to the council to decide what it’s used for.

“Our budget is fine as-is,” he said. “We’re not going to count our chickens before they hatch.” It’s not just about one city, though, and Lockwood said he wants to see something that would not hurt anyone else.

“We want to work with the rest of the cities to come to terms with all the other cities,” he said.

Milton’s budget year starts in October and Lockwood said they would be able to plan for a change in money flow depending on this decision.

Johns Creek follows the same budget calendar, but Johns Creek Mayor Mike Bodker is not as optimistic that the issue will be resolved by then.

“I fully expect this to go to litigation and it probably won’t be resolved until 2013,” he said.

Bodker said only three cities would benefit from distribution based on point of sale: Atlanta, Sandy Springs and Alpharetta.

Johns Creek is still evaluating what venue they want to support. Population has grown from 62,000 at incorporation to 76,000, but Bodker pointed out growth alone does not mean anything.

“It’s all relative to the other cities,” he said.

He also said no single factor – population or point of sale for example – would end up being the sole component to the new distribution.

Like Lockwood, Bodker recognizes the need for partnership among the cities.

“The parties in north Fulton – and south Fulton I believe – are very friendly to each other so they will work it out among themselves,” he said. “It’s just a matter of what the county will say.”

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