Local News

October 10, 2012

Whitfield, Dalton set to start mediation on sales tax

The Whitfield County Board of Commissioners and the Dalton City Council will bring in a mediator this week to help them try to reach an agreement on how to divide the Local Option Sales Tax (LOST).

The sides are set to meet Friday at Dalton State College’s James Brown Center with Bill Goodman, an Atlanta-based attorney and mediator.

“He is an experienced attorney who has handled a lot of complex litigation and has been doing mediation for the last 10 or 12 years,” said Whitfield County Attorney Robert Smalley.

Each side will be in a separate room with the mediator moving back and forth between those rooms. Georgia’s open meetings law permits mediation sessions to be closed to the public and the media. County officials say the meeting will be closed.

“It seems a little cumbersome to me to have a public meeting to say ‘We are glad you came. Now we are going into separate rooms,’” said Board of Commissioners Chairman Mike Babb.

But Dalton Mayor David Pennington said he would like a public meeting before the two sides go into their separate rooms.

“When we are in there together, why does it have to be closed? We are discussing taxpayer dollars,” Pennington said.

State law requires that cities and counties renegotiate their LOST agreements every 10 years after the results of the latest census are in.

Under state law, since the two sides didn’t reach an agreement during the first phase of the negotiations, they now will go through 60 days of non-binding mediation.

The sides remain apart on the actual split of LOST revenue. In their last public request, Dalton officials wanted 45 percent with the county getting 50.967 percent and the rest split among the three smaller cities in the county. Commissioners offered Dalton 30 percent, with the county keeping 67 percent and the rest split among Cohutta, Tunnel Hill and Varnell.

If the two governments still can’t reach an agreement, the matter will go to a Superior Court judge from outside the district who will decide the matter, similar to baseball arbitration, by picking one side’s offer.

“From the city’s perspective, we should know by the end of the day Friday whether it’s going to be possible to reach an agreement or whether we will go to a judge,” said Pennington.

The sides have reached tentative agreements on a number of issues, such as merging the city and county recreation departments and the county ceding its half ownership of the Northwest Georgia Trade and Convention Center to the city.

Both sides have also tentatively agreed that the county will create special tax districts to fund the county fire department and the county’s share of the Dalton-Whitfield Joint Development Authority, the Dalton-Whitfield County Library and the Dalton-Whitfield Solid Waste Authority so that Dalton taxpayers are no longer paying for services that primarily benefit residents outside the city.

Babb says creating the special tax districts is expected to increase the tax rate on property owners outside the city by about 1.6 mills.

Last year, a state Superior Court judge found in favor of 15 cities that sued Gwinnett County, ruling their residents don’t have to pay taxes to fund services that primarily benefit residents of unincorporated Gwinnett. Gwinnett officials at first filed an appeal, but earlier this year they agreed to settle the suit and pay the cities $32 million. They also agreed to create four special tax districts to fund services such as fire protection and police services outside those cities that provide those services.

Dalton officials are also pressing the county to fund its share of recreation out of a special tax district. But county officials are so far resisting that appeal, saying because recreation is a countywide service it should be funded by a countywide tax.

The sides are also split on when special tax districts should be formed.

City officials want them in place this year before the county collects 2012 property taxes.

“We sent them a letter in February telling them they can’t continue to tax city taxpayers for services they provide primarily to residents of the unincorporated areas,” Pennington said. “They are talking about a millage rate increase for all of Whitfield County, including city of Dalton taxpayers.”

The Board of Commissioners has advertised a 2-mill property tax increase, but commissioners have said they may not approve the full 2-mill increase. They are slated to set the 2012 tax rate Thursday after public hearings at 11:30 a.m. and 6 p.m. in Whitfield County Administration Building No. 2, 214 W. King St. in Dalton.

Babb said the 2012 tax rate will fund this year’s budget and any special tax districts will be created next year.

“We have to have some time to make some preparations,” he said.

The LOST currently brings in about $17.2 million a year, and under the current LOST agreement negotiated 10 years ago the county gets 83.24 percent, Dalton gets 14.93 percent, Cohutta gets 0.38 percent, Tunnel Hill gets 0.65 percent and Varnell gets 0.8 percent.

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