Jackson County leaders presented a proposal to city officials Tuesday that will give the county a larger percentage of local option sales tax (LOST) revenue.
The county is proposing that it receive 63.3 percent of the sales tax revenue, which is one percent more than the county is currently getting. The remaining 36.7 percent would be divided among the cities based on a formula that takes into consideration population, the tax digest and general fund expenditures.
Representatives from all nine towns were present at the hour-long meeting held at the fire training center in Jefferson, but no one commented on the proposal. After the meeting ended and county leaders left, city officials remained at the fire training center to further discuss the sales tax negotiations, but the media was not allowed to stay. Jefferson city manager John Ward asked the two media representatives present to leave.
The next step will be for the city representatives to appoint a negotiating team to meet with the county to further iron out the details of the sales tax allocation. If the cities and county cannot agree, the matter will go to mediation and then arbitration. In Banks County, this happened earlier this month when the cities and county could not agree on a sales tax allocation.
The sales tax allocation that is currently in use was approved in 2002.
The formula used to determine what percentage of LOST revenue that each county and their cities receive is negotiated every 10 years, after the latest Census. More LOST distribution formulas are based on population — with larger cities and counties receiving a bigger piece of the sales tax revenue pie. State law also requires that LOST distributions consider other factors, such as public services provided in an area.
LOST is different than SPLOST (Special Purpose Local Options Sales Tax).
While LOST is collected perpetually and the distribution formula is determined by counties and their cities for a 10-year collection period, SPLOST is approved by voters for specific projects and funds are typically collected for four to six years.
In the meeting on Tuesday, county manager Kevin Poe presented the following points the county would like the city leaders to consider as they review the LOST proposal:
•The county provides services to incorporated residents and includes them in the county’s LOST rollback on the property tax bill.
•City residents are getting a higher per capita LOST benefit than an unincorporated resident ($220 vs. $88) because they receive a double tax revenue advantage compared to those in the unincorporated area.
•There should be no claim by the cities that there is a double taxation issue and therefore deserve extra benefit of the LOST rollback. HB 489 requirements and the subsequent service delivery agreement that was negotiated addressed this and therefore there is no reason to continue the inequity in sales tax distribution. The service delivery agreement resulted in some shift of responsibility for certain services from the cities to the county.
•With an increase in population for the entire county came an increased demand in mandated services the state requires the county to provide all of its citizens. The county has very limited control over the cost to provide these services.
•The county has long-term general obligation debt related to significant infrastructure it has put in place to serve all residents of the county and to stimulate economic development. This benefits the cities as well as the county. Any reduction in the LOST distribution to the county would have a negative effect on the county’s general fund budget and our ability to meet our debt service payments.
•Based on the report completed by Jerry Weitz and Associates Inc. in 2010 that is part of the county’s comprehensive plan, the unincorporated area population percentage is expected to increase over the next decade by at least one percent.
