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City and county begin sales tax negotiations

Michael Brown, a consultant hired by the city to develop a Local Option Sales Tax ratio at left, explains his position to Dougherty County Commissioner Ewell Lyle, foreground, during the question-and-answer portion of LOST negotiations at the Civic Center.

Michael Brown, a consultant hired by the city to develop a Local Option Sales Tax ratio at left, explains his position to Dougherty County Commissioner Ewell Lyle, foreground, during the question-and-answer portion of LOST negotiations at the Civic Center.

— Albany city officials and Dougherty County leaders began negotiations on how locally-collected sales taxes are split amongst the two.

The City of Albany contends that they are justified in seeking 79 percent of local sales taxes while the Dougherty County Commission is seeking a 53 percent cut.

Currently, the taxes are split 60/40 with the city receiving the majority of the funds.

If the two governments can't work out an agreement within 60 days, they then enter into non-binding mediation. If there is still no agreement, a judge from a different judicial circuit would hear the best offer from both and select one to be binding for the next 10 years.

Michael Brown, a former city manager for Savannah and Columbus-Muscogee County, pitched the city's case, arguing the city is the predominant service provider within Dougherty County and is home to the majority of the industrial, retail and residential tax base and should therefore receive at least 80 percent of the sales tax split.

According to Brown, Albany has 81 percent of the total population, 86 percent of the total daytime population, 90 percent of the county's total share of those below the poverty level, 96 percent of the total county accommodation and food service sales, 92 percent of the total county commercial tax digest, 58 percent of the county's total industrial digest, 69 percent of the county's total residential digest, 57 percent of the county's total number of non-profit agencies, 99 percent of the county's total Healthcare revenues and 90 percent of the total jobs in the county.

"Based on the figures, it would be justified for the split to be in excess of 80 percent," Brown said. "I think that when you look at the predominant nature of services and population...for the city to ask for any figure in excess of 80 percent would not be unfair."

Countering that argument is Dougherty County, whose consultant, Phil Sutton -- a former county administrator in Hall and Athens-Clarke County, pitched the concept that Dougherty County residents on the whole provide services to everyone within in the county, including those who live within the city limits and should therefore be entitled to a majority share of the sales taxes.

Using this logic, Sutton took the total number countywide for any one statistical area and used it as a comparison against the data for the city alone.

For example, in terms of residential population, Sutton contends that Dougherty County has 55 percent of the total population by taking the total number of people who live in the city -- 77,434-- and adding the population of the unincorporated portion of the county -- 17,131 -- for a total of 94,565. He then added that figure by the city's population again to come up with 171,999 -- a number Brown called him out on.

"The census data shows that the population of Dougherty County is not 171,000," Brown said. "We all wish it were, but that just isn't the case."

"The fact remains that that the county provides its general fund for the benefit of everyone in the county," Sutton said. "It's really a service district comparison more than an unincorporated area versus the City of Albany."

It's a move suggested by the Association of County Commission to make sure that local governments avoid what the organization calls the "unincorporated" trap -- a move where cities only include unincorporated areas as the parts of counties and neglect the cities themselves.

State law mandates that every 10 years local governments come together to negotiate the split of sales taxes based on at least eight different criteria. Those criteria include population, service delivery responsibilities, the effect of a change in the sales tax split on a government's ability to pay its debt, point-of-sale and use data and any subsidized services paid by one government to the benefit of another.

Previously, most local governments used population as the sole determiner of sales tax splits.

The purpose of LOST funds are to defray property taxes by supplementing the general funds of local governments.

"It's important from the county's perspective that the end result be fair to the taxpayer because ultimately, this is a property tax rollback," Sutton said.

Comments

jglass 1 year, 9 months ago

GOODNESS!!! Lets see what happens with this!!!!

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Progressive 1 year, 9 months ago

What is really tragic is the time and money that is spent by both the City and County on these LOST tax dollar split negotiations. On top of that, the wasted tax money spent on hiring consultants to provide their input for a percentage split between the City and the County. There are many other contract negotiations that also take place between the City and County. What a waste of resources!

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J.D._Sumner 1 year, 9 months ago

Progressive, I'm not sure I understand your statement, but state law requires new LOST negotiations every time there's a new census. You're right on the consultants. Both the city and the county have hired their own consultants to justify increases in their splits.

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Progressive 1 year, 9 months ago

J.D - Read the response below from Cartman for having a pre-established method that was probably used in past split determinations. Then think about why the CIty and County are having to spend more money to go through these negotiations. If the structure were like Macon, GA or Jacksonville, FL, there would be no need for any of these negotiations.

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Cartman 1 year, 9 months ago

Seeing how this is an issue in both Dougherty and Lee Counties, I wonder why a standard forumula isn't already in place. We already know that percentages will change somewhat after each census. Why not already have a protocol for making the adjustment?

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whattheheck 1 year, 9 months ago

My goodness, children, if we are going to have these fights, let's just don't cut out the LOST! Realistically, one would think the monies should be split along the lines of where it is generated. This would naturally favor the city and logically is how it should be done. Further if the theory is the money is an offset to property taxes, from the perspective of those living in the incorporated area it sounds like a "pocket to pocket" transaction to me--less city tax or less county tax for these people is still, well, less tax regardless of which pocket the money is in. In this case it is more a matter of who gets the "power" attached to the money and gets to decide how it is spent--and the loser becomes the unincorporated area which may be fitting with 17,000 out of 94,000 people, or less than 20%.

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waltspecht 1 year, 9 months ago

The SPLOST money is generated from the Taxpayers pockets. No matter where it is spent. It's purpose was to provide an extra source of income from outside the normal tax base. If memory serves me right, the sales tax on a vehicle goes to the County of residance of the registered owner. Is that still the way things are? Plus. is the SPLOST singled out and removed from the base sales tax to remain in the County or entity of purchase? Maybe we should go back to the sales tax on personal sales of vehicles and boats when they are registered? How about when you purchase things on the internet in a taxable situation, the Company has a physical presence in the State, Are Splost charges assigned by home or delivery address? Somehow there needs to be a way of taxing all these deals or trades that go on. The so called shadow market.

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