LEESBURG, Ga. -- When officials from Lee County and the municipalities of Leesburg and Smithville meet Friday to discuss distribution of the county's Local-Option Sales Tax money, the implications -- especially for the small cities within the county -- could be far-reaching.
At stake are tens of thousands -- indeed millions -- of tax dollars that are vital to each entity's budgetary bottom line. And the question that's paramount on all participants' minds is, simply, how much are we going to get?
LOST was authorized by the state of Georgia in 1975 as a way to provide tax relief for property owners. The 1 percent tax, which had to be passed by local referendum, was tacked on to the 4 percent tax rate imposed by the state and was to be distributed among governmental entities located within Georgia's 159 counties.
Using primarily population figures as a guide, records show that Lee County leaders decided at their first LOST meeting that the city of Leesburg would get 17 percent of the tax funds collected and Smithville would get a whopping 13 percent. The other 70 percent would go to the more heavily populated unincorporated county.
Even after a huge growth spurt that reached its peak in the early 1990s and more than tripled the county's population, the LOST percentages were left relatively unchanged after census numbers were tallied each decade.
Now, with Leesburg the home of slightly less than 10 percent of the county's population and Smithville less than 2 percent, there is talk among some leaders of adjusting the LOST numbers. Officials in both Leesburg and Smithville, however, say a dramatic shift of funding could devastate their respective budgets.
"Population should be a factor (in determining LOST distribution), but it can't be the only factor," Leesburg Mayor Jim Quinn said. "The populations of Leesburg and Smithville have not gone down dramatically over the years, they just haven't increased as much as the county's population. But there are so many other factors to consider.
"You have to look at, for instance, the daytime population in Leesburg, where all of the county's students come for school, while the majority of the population in the county goes to Albany and Dougherty County to work. Plus we pay for services at the Bob Boney Senior Center and at the library, and more of the county's population uses those facilities than the city's. We have to look at the numbers, but it's going to depend on whose numbers we use."
Lee County Commissioner and Budget Committee Chairman Bill Williams says that, by all standards of measure, the county's municipalities are getting more than their fair share of LOST money.
"We have scenarios worked out -- as I'm sure Leesburg and Smithville do -- and in our scenarios they deserve less of the money," Williams said. "The numbers haven't changed here since the county started collecting LOST, and I can't for the life of me find any rhyme or reason -- at least not a mathematical reason -- for how they came up with those percentages.
"Based on eight criteria on the Association County Commissioners of Georgia website -- which include population, shares of property taxes, shares of the property tax digest, expenditures -- those percentages do not make sense. So what we expect to do is bring our figures to the table, defend our position and in the end hope we reach some kind of happy medium."
Quinn argues that criteria city leaders have considered point to a larger share by the city of Leesburg, while longtime City Councilman Bob Wilson said he'd like to see the percentages stay the same. Wilson has been involved in LOST negotiations in Lee County since they were first authorized.
"The LOST money doesn't just come from property owners, it comes from everyone: people in the county, people from out of the county and people from out of the state who spend money here," Wilson said. "I think the percentages we've been working under are fair, and to change them now would dramatically affect our budget and would be, I think, an injustice to the people of Leesburg.
"I hope (county officials) will go into this process open-minded. I know two or three of them are up for re-election, and I know they don't need the bad publicity of an ugly battle over the tax money."
Smithville, meanwhile, could stand to lose the most in the battle over LOST funds. A dramatic cut to the small community's share could leave the municipality struggling for survival.
Smithville City Attorney Tommy Coleman said he expects officials to "be big boys and work out an agreement that everyone can live with." If not, though, he said he's ready to suggest dramatic action allowed by the state.
"If we can't agree on the distribution percentages, we have the option of becoming an 'absent city'," Coleman said. "It's a long, drawn-out process, but it could be in (Smithville's) best interest."
Coleman explained that, 60 days after a non-productive meeting, there would be a period of mediation, and if no agreement is reached, 60 days after that there could be what the state is calling "baseball arbitration."
"In that kind of arbitration -- which is used by Major League Baseball -- an arbiter would look at the county's numbers and the city's numbers and decide which of the two is more equitable," he said.
If Smithville becomes an absent city, it would be entitled to whatever percentage of the funds designated for the county's municipal population that is equal to Smithville's overall municipal population in the county. Thus, if Leesburg has 10 percent of the county's population and Smithville 2.3 percent, the smaller city would get no less than 20 percent of funds designated for municipalities.
"Of course, we're going into the process looking to settle this amicably," Coleman said. "My guess going in, though, is that the people of Smithville already feel that they're put-upon, and they will take a long look at this process."
The County Commission's vice chairman, Rick Muggridge, urged his fellow government leaders to consider what he says is a major factor: That they all represent the same people.
"At the end of the day, as representatives of Lee County, Leesburg and Smithville, we all have a duty to look out for the best interests of all the people of this county," he said. "If we allow this to turn into a fight, we're hurting ourselves and our constituents.
"I know compromise has become an awful word in some parts these days, but that should be the direction we're heading in as we go into this meeting. We also have to remember that this thing is a moving target, and that while the county is looking at information provided by ACCG, the cities are getting information from GMA (the Georgia Municipal Association). And the information is decidedly different."
Muggridge said determination of service delivery should be a priority concern as LOST fund distribution is considered.
"We need to ask ourselves: 'Who bears the cost'?" he said. "When we come up with that answer and consider issues like population, tax digest, percentage of sales tax and service delivery, then we all need to be reasonable."
County Administrator Tony Massey echoes Muggridge's call.
"I know the attitude of the County Commission going into this is that we intend to be fair to all 28,000-plus citizens of Lee County," he said. "We're going to take into account each and every one of them with an attitude of trying to be reasonable."
Lee, Leesburg and Smithville officials will hold the joint session Friday at 1 p.m.