Jackson County and municipal leaders reached an agreement on the distribution of local option sales tax (LOST) revenue.
Jackson County will receive 60 percent of the sales tax revenue and the cities will divide the remaining 40 percent based on a formula that takes into consideration population, the tax digest and general fund expenditures.
The new formula puts a higher percentage of the money into county coffers and less into those of the municipalities. Commerce, among the cities, will take the biggest hit.
The county had first proposed that it receive 63.3 percent of the sales tax revenue, which is one percent more than the county is currently getting. The county and cities met several times to try and come to an agreement but appeared to be at an impasse. There have apparently been some behind-the-scenes talks because board of commissioners chairman Hunter Bicknell announced at a meeting Monday night that an agreement had been reached. The commissioners voted unanimously to approve the 60-40 allocation.
Jefferson city manager John Ward said that a majority of the cities approve the allocation as required by law.
In Commerce, based on last year’s income, the city stands to receive $240,000 less than it did in 2011. The city budget anticipated a cut of just $130,000, creating a $110,000 shortfall that contributed to staff layoffs.
A breakdown for what percentage each city will receive is as follows: Jefferson, 15.67 percent; Commerce, 10.87 percent; Arcade, 2.97 percent; Braselton, 2.93 percent; Nicholson, 2.82 percent; Hoschton, 2.29 percent; Maysville, 1.45 percent; Pendergrass, 0.70 percent; and Talmo, 0.30 percent.
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 after the latest census every 10 years, although the tax itself continues indefinitely. Most 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 Option Sales Tax), which is a short-term tax approved by referendum for specific projects and funds are typically collected for four to six years.
