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Peach officials hope to avoid arbitration in LOST negotiations

Peach County officials don’t expect to need a judge to decide how a sales tax is split among their three governments, but the new arbitration step places more pressure on true compromise in the process.

“I’m optimistic that we’ll reach an agreement” before arbitration, said Peach County Commission Chairman Melvin Walker.

The officials from Peach County, Fort Valley and Byron have been discussing how to split the 1 percent sales tax since June 19. Most counties in the state are doing the same, as state law requires the negotiations every 10 years.

The cities of Fort Valley and Byron remain steadfast on getting 53 percent to divide between the two. The county doesn’t want less than the 60 percent it currently receives.

They have one meeting -- at noon Wednesday -- left in this phase of talking among themselves.

“I wouldn’t say we’re at a standoff,” Walker said.

Still, since the governments have yet to agree, a licensed mediator has been put on standby in case a decision isn’t made by Friday’s deadline.

Then, they’ll have 60 days until they’re forced into baseball arbitration. It would require an out-of-county judge to decide the distribution for the officials.

The new step was added in 2009, but this is the first negotiations year since.

“Hopefully, nobody will get to that point,” said Amy Henderson, spokeswoman for the Georgia Municipal Association.

Henderson said the arbitration step was added to require counties to negotiate in good faith.

In years past, the process ended after mediation.

If a decision was not reached by Dec. 31, the LOST lapsed. Then, the county would be able to enact a 1-percent homestead option sales tax, or HOST, which only goes to the county.

“That was kind of leverage that the counties could hold over the cities,” Henderson said.

Two Georgia counties, De-Kalb and Rockdale, have HOSTs, according to Henderson.

Walker said the arbitration phase does “increase the level of risk” for the county.

“It creates some heartburn for us,” he admitted.

Fort Valley Mayor John Stumbo, who is the only one of the three government leaders who participated in the negotiations 10 years ago, said the step gives some footing to cities.

“The county cannot sit back and not do anything and levy a HOST,” Stumbo said, adding that hasn’t been a problem in Peach County.

Many factors involved

To make an agreement happen, at least one side is going to have to give.

“If we’re going to do mediation rather than going straight to arbitration, the law says ... we mediate in good faith,” Stumbo said. “That means I can’t go to mediation and not be willing to compromise.”

It’s not as easy as saying they want to agree. They’re all fighting for their respective budgets, and therefore taxpayers.

The LOST functions as a rollback on the millage rate for each entity.

“Sales tax is the second largest revenue-generating tool, behind property taxes,” Stumbo said. “These dollars have a significant impact on all of the governments.”

The LOST generated about $35.8 million between January 2003 and May 2012.

Still, the guidelines the state provides for the decision-making aren’t black and white. There are eight criteria the officials are supposed to give weight to, including the point-of-sales and service delivery.

Byron Mayor Larry Collins said the guidelines have at least one major flaw.

Weight is supposed to be given for the services each entity delivers, but there are services the cities deliver through enterprise funds. Since the sales tax affects property taxes that go into the general fund, the cities cannot consider the services they deliver through enterprise funds.

“It’s really a bad situation that the legislators put on us,” Collins said.

Stumbo said he has spent years telling state officials they need to establish a more definite formula.

“The argumentative process, debative process -- whatever adjective you want to put on it, it’s counterproductive,” Stumbo said. “If we’re going to have this decennial update, the legislature needs to come up with a formula that is applied across the state.”

Walker said those guidelines are plenty for the officials’ decision because every county’s makeup is different, and a stringent formula wouldn’t work everywhere.

Moreover, he said, there’s no reason for the officials to wait every 10 years to start talking.

“Maybe we’re asking the state to solve our problems,” he said. “We ought to be able to sit down and figure it out.”

To contact writer Christina M. Wright, call 256-9685.

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