FORT VALLEY -- Peach County officials, and those in at least 17 other counties, are struggling to understand the ramifications of a Georgia Supreme Court ruling that may have left them without enough money to fund their budgets.
Peach County -- and its cities within -- may lose its 1 cent local option sales tax, which is used to roll back the millage rate, after the court ruled a new process the legislature enacted is unconstitutional. For now, there are more questions than answers about whether the tax will stop immediately, when it could be reimposed and how the governments would function without it.
Guidance should be available by the end of the week, said Nick Genesi, a spokesman for the Georgia Department of Revenue, which is working with the state attorney general on an official interpretation of the ruling.
All but three of Georgias 159 counties have such a tax, called a LOST, and most were approved by voters years ago. The funds from that sales tax go to cities and counties general fund, so taxpayers pay a lower millage rate than if the tax did not exist.
Peach County would need a millage rate of 17.041 mills to balance its general fund. But the LOST, enacted in 1976, allowed commissioners to pass a 13.555 millage rate for fiscal 2014, which began Oct. 1.
Every 10 years, state law requires a county and cities within to renegotiate how the LOST revenue would be split among the governments. The legislature added a final step that went into effect last year that allowed the governments to ask a judge to make the decision in arbitration if they could not agree by year-end.
The Georgia Supreme Court ruled Monday that arbitration is unconstitutional because its a judicial process making a decision on taxes -- a legislative function. In short, arbitration violates the constitutions separation of powers.
As Peach County Attorney Jeff Liipfert -- and county attorneys he spoke with Monday -- interpreted the ruling, the process now reverts back to the previous law that says any county without a distribution decision by the end of last year forfeited its LOST.
Peach is one of 17 counties in the arbitration phase. Others have already had judges decide their taxes split. Neither Liipfert nor Amy Henderson of the Georgia Municipal Association could say whether both or just one of those groups is affected by the courts ruling.
Were hopeful that they (the counties) will be able to collect the tax while they (the policy makers) work out their differences, Henderson said.
But Liipfert didnt seem so hopeful as he explained the ruling to a stunned board of commissioners Tuesday evening. Every question hit a roadblock that led to yet another question.
Yall need to be on your legislators like bees on honey, Peach County Administrator Marcia Johnson told commissioners.
Best case scenario is the legislature will need to write a new law helping these counties, but the legislature isnt back in session until January. If the LOST is gone and the county needs to ask voters to re-implement it, the first available date for a special election is in March. But what if officials want to wait to see what the General Assembly does? Then, the special election wouldnt be until late 2014, and if approved, the LOST could not go into effect until months later.
Even if the legislature ... goes back to extending that deadline, it may be a while before you see any money, Liipfert said.
Eventually, the commissioners began wondering how they arrived in this boat where they are now looking at a $2.2 million gap in a $15.9 million general fund budget.
Theres the legislature that passed a bad law, Liipfert offered. Chairman Melvin Walker conceded the county and city leaders failed as elected officials to come to an agreement before the Dec. 31 deadline. But Commissioner Roy Lewis, with nods of agreements from some colleagues, pointed the finger at Fort Valley Mayor John Stumbo.
Peach County filed paperwork for arbitration nearly a year ago. Initial negotiations stalled as Fort Valley and Byron asked for a bigger piece of the pie, and the county refused to give up its larger percentage. In October 2012, the group asked for arbitration but continued talking behind the scenes.
Thats when, Lewis said, the county inched away from its current 60 percent slice. He said the county even offered to accept the cities proposal for the county to receive 47 percent, on the condition Fort Valley and Byron take over the functions of the E-911 center and libraries.
What do you do beyond that? You cant get any fairer than that, Lewis said. I dont want anybody to leave here thinking that this board was at fault for that.
But Stumbo said blame cant be placed on either side.
What you can say is, you held the process up because I didnt agree, Stumbo said. And thats not fair, any more than the county held up the process because they didnt agree with me.
Fort Valley stands to lose $1.2 million of its $5.3 million general fund budget without the LOST.
Still, Stumbo said he is confident the legislature will allow a temporary certificate that was filed before the end of the year to stand for now. The state cant afford for the LOST to be lost.
Thats going to throw a whole bunch of cities and counties across the state into a real -- that just isnt gonna happen, Stumbo said.
To contact writer Christina M. Wright, call 256-9685.