Local News

October 17, 2013

Tax decision likely to have little impact

The Supreme Court of Georgia recently tossed out part of the state’s Local Option Sales Tax (LOST) law. But local officials say the ruling should have little effect on the LOST agreements they signed last year.

The court tossed out a section of the LOST law that said that if cities and counties could not agree on how to split the revenue from the sales tax a judge from outside the area would decide how to split the revenue. The judge would consider plans submitted by both sides and pick one in a manner similar to arbitration hearings in Major League Baseball.

But the court ruled that provisions violated the constitution’s separation of powers by allowing a member of the judicial branch to determine how tax money is spent.

“That really shouldn’t affect us because we did not go before a judge,” said Dalton Mayor David Pennington. “The leadership of Whitfield County and Dalton sat down and settled the matter amongst ourselves in the best interests of all our citizens.”

Whitfield County Board of Commissioners Chairman Mike Babb said that at the moment it looks like the ruling won’t affect the agreement the city and county signed in 2012.

“Right now, it looks like all they said is that the judicial arbitration part was bad. Well, we never went before a judge,” he said. “But we are waiting to see how everyone else reacts. If one part of the law is bad, does that mean the whole thing was bad?”

The measure calling for baseball type arbitration was added to the law in 2010. Previously, if cities and counties could not agree on how to split LOST revenues they would lose the power to collect the tax.

“We are also waiting on to see what the Legislature does. I would think they are going to have to change the law,” Babb said.

State Sen. Charlie Bethel, R-Dalton, said he hasn’t had the opportunity to read the decision yet but it shouldn’t invalidate any LOST agreements that were made without going before a judge.

“The General Assembly will take up the law again, I’m sure. With that piece missing, if cities and counties reach an impasse, there’s nowhere for them to go,” he said. “But none of those agreements are coming up soon. I don’t believe any will come up in 2014. So there’s no need to act quickly, and I don’t think we will take this up next year. I don’t believe there will be much sympathy for reopening agreements made by elected officials without the intervention by any other authority.”

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