Judge to push Peach County into LOST arbitration

chwright@macon.comApril 22, 2013 

An Albany-Dougherty County senior judge says it’s likely time to nudge Peach County officials into the courtroom to settle the division of a penny sales tax.

It’s four months past the Dec. 31 deadline in which Peach County and the cities within it were supposed to decide how to divide proceeds from the local option sales tax for the next 10 years. A new arbitration phase state legislators added in the decennial renegotiations has allowed the county and cities to delay the decision.

“The last I heard, they were attempting to resolve this among themselves,” said Judge Lorring Gray. “But given the passage of time ... I may need to light a fire.”

Peach County and its two cities asked Gray to postpone their January hearing date. Gray said he will reach out to the entities by the middle of the week. Per the arbitration rules, Gray was selected as an out-of-county overseer.

“It’s unfortunate that we have to go into this,” said Chairman Melvin Walker, of the Peach County Commission. “We all know what we do, we all know what the expenditures are, and we ought to be able to sit down and figure something out.”

Every 10 years, Georgia counties that have a LOST must renegotiate how it will be split among the local entities. It functions as a rollback on the millage rate, used to determine property taxes, for each entity.

For last year’s process, the state enacted a final phase that allows a judge to decide for the entities if mediation doesn’t work. Arbitration was supposed to give the cities a better position in the talks. In years past, the LOST would lapse after Dec. 31, and the county had the option to impose a homestead option sales tax, or HOST, that would go entirely to the county.

Now, the split remains the same, even after Dec. 31, until a decision is made. The law enacting the LOST does not set a deadline to complete arbitration.

Under the last deal, Peach County received 60 percent of the sales tax. Fort Valley and Byron split 38 percent, and Perry and Warner Robins receive the remainder.

“It would behoove us to get this thing done because we’re losing a share,” said Mayor John Stumbo, of Fort Valley.

Byron and Fort Valley have insisted they should receive more of the LOST, partly because the majority of the county’s population resides within their limits. By extension, most of the sales tax is collected in the cities, officials say.

Stumbo said the cities can’t accept the most recent proposal from the county, in which the latter would receive 58 percent. The cities’ last proposal was for the county’s portion to whittle down, ultimately to 47 percent, over the next 10 years. That would give the county time to adjust to a smaller income level, and the cities would receive 53 percent by 2022.

Walker said the county can’t receive less than 58 percent of the LOST. He argued the county provides services, such as 911, for the county and cities.

“We get something from phone tax, but that doesn’t come close to covering it,” Walker said, pointing out a recent audit showed a nearly $1 million shortfall.

He added he wanted officials to make a decision without arbitration because the outcomes have been unpredictable around the state.

“The people of Peach County will probably suffer,” Walker said, explaining a lower LOST level would mean higher taxes or fewer services.

Gray said he has four other LOST cases headed to arbitration. He said it doesn’t really hurt the entities not to make a decision, but he’d rather them settle as soon as possible.

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