ASHBURN, Ga. — In what may well be a landmark decision, Georgia Senior Judge O. Wayne Ellerbee ruled Monday and released Friday his findings in the first “baseball arbitration” local-option sales tax ruling that has gone through the entire process laid out by the state Legislature.
Ellerbee ruled in favor of the municipalities of Ashburn, Sycamore and Rebecca in their quest to secure 50 percent of the 1 percent LOST funds collected in Turner County over the next decade. County officials had sought to maintain the status quo, asking for 65 percent of the $886,816 in annual LOST collections.
Albany attorney Tommy Coleman, a partner in the Perry & Walters firm, represented the city of Ashburn in the case that was heard in Turner County Superior Court.
“Toombs County has gone through a couple of days of hearings, and Valdosta/Lowndes County is going through a big battle,” Coleman said Friday after receiving Ellerbee’s ruling. “But this hearing is the first one that has gone through the entire process laid out by the Legislature: the negotiating period, the mediation period and now the arbitration ruling.
“We feel that Judge Ellerbee made his decision based on the eight criteria laid out by the Legislature; the law is pretty much cut-and-dried. The baseball arbitration element was brought into the process to stop counties from making unilateral decisions about taxes like Turner County did when it forced the municipalities there to accept a 65-35 LOST split in 2002.”
Ashburn, Sycamore and Rebecca were dividing a 50 percent split of LOST funds in 2002 when county officials decided they wanted to increase their take to 65 percent, Coleman said. The law at that time declared that counties that did not have an agreed-upon split in place by Dec. 30 of the second year after the census would lose the 1 percent tax altogether.
“The county decided they wanted the 65 percent, and they were willing for it to go away if the municipalities didn’t agree,” Coleman said. “The city, literally at 11 p.m. on Dec. 30 of 2002, agreed to accept a 35 percent share of the tax.
“The city of Ashburn (Turner’s county seat) went from a 41 percent split to a 27 percent split overnight. They had to cut services, and they’ve raised taxes twice in the time since that ruling. The county, meanwhile, increased its fund balance from $3.5 million in 2005 to $7 million by 2011. I think the judge took that into account when he made his ruling.”
The state laid out eight criteria for use in determining the LOST split in each county: service delivery to population served, service delivery to resident population, service delivery to each local government, distribution changes and debt obligations, point of sale and use which generates tax revenue, intergovernmental agreements, tax equity/double taxation, and service delivery to any coordinated city/county plan.
Consultants for both Turner County and its municipalities presented reports to Ellerbee that purported to determine a fair LOST split based on the criteria. The cities’ consultant determined those municipalities were entitled to 59.81 percent of the funding, while the county’s consultant offered evidence he said supported a 75 percent take.
“If you look at their report, everything they included was based on property taxes,” Coleman said. “They also tended to view the (LOST funds) as one apple as opposed to our view that it is actually four.”
Coleman said he doesn’t know if Turner County officials will accept Ellerbee’s ruling or challenge it.
“That’s their decision,” he said. “I was, I think, the only person involved in this case who was a city official (in Albany) when the LOST law was first implemented in the ‘70s. The one thing that I felt was clear was that this was not a county tax but a joint/special tax district tax. The judge agreed.
“I represent three counties (Baker, Randolph, Stewart) and about 28 cities (including Smithville in Lee County), and what I’ve noticed during this process is the kind of thing you see with the federal government now (with the so-called fiscal cliff). No one really wants to give in in that kind of atmosphere. I have a saying: ‘For God so loved the world that he gave his only begotten son ... not committee.’ Even though each county is different, I think some (government) leaders are going to look at Judge Ellerbee’s ruling as they move forward with their (LOST) processes.”