A disagreement over how to split local option sales tax revenue in a south Georgia county is going all the way to the Georgia Supreme Court. The ruling could have a major impact on taxpayers across the state.
When leaders in Turner County and the cities there couldn't agree on how to distribute the revenue, the case went to arbitration. The judge ruled in favor of the cities, and now the county is suing, challenging the constitutionality of the whole process.
Last year, Georgia cities and counties had to negotiate how to split their local option sales tax, or LOST, revenue. The General assembly changed the process, so if the local governments can't agree during a mediation period, a judge decides.
"Before 2010, if you didn't agree and the county or city just didn't sign it went away," said Ashburn City Attorney Tommy Coleman. " And that's really the evil the general assembly tried to fix. And that's the crux of this argument-- Is to put cities and counties and everybody in the tax district on equal footing and have this arbitration so that an independent third party could decide."
Turner County and Rebecca, Ashburn and Sycamore were the first to go before a judge, who ruled in favor of the cities granting them 50% of the revenue. Now Turner County is challenging the process, saying the so called baseball arbitration is unconstitutional.
"What happens in baseball arbitration is the court has to choose between one or the other offer, they can't make any amendments or any changes," Coleman said. "And also the law doesn't require a hearing. It clearly says the judge can do whatever he wants, he can have a hearing if he wants to or whether he doesn't want to. And they think that's inappropriate."
Coleman, who represents the cities, says the issue is slated for the June term. Until the court issues a ruling, counties and cities across the state are in limbo. "I think it's kind of had a chilling effect on cities and counties and the judges and the lawyers dealing with these things moving forward. Because nobody wants to do a great deal until they find out what the supreme court really says about this."
And the justices' decision could create a burden on taxpayers. "If they actually threw out the entire statute then there wouldn't be a LOST statute, therefore there wouldn't be collecting that one percent, whether it's Albany, Dougherty, Lee or Crisp, or any of the counties wouldn't be allowed to collect that 1% LOST," said Albany City Attorney Nathan Davis.
The loss of that money could mean a reduction in services or a property tax increase. The Supreme Court could rule against Turner County, or they could agree and do away with the statute, or just make changes to certain portions. Tommy Coleman says it's anyone's guess.