Deal reached on sales tax split
County lauded for offering workable deal
A deal has been brokered between county and city government officials in Fayette County on how to distribute local option sales tax (LOST) dollars over the next 10 years.
The Peachtree City Council approved the deal formally Thursday night. It calls for the phasing in of a switch from the current provision in which the county gets 50 percent of those funds and the remaining 50 percent are split by the municipalities including Peachtree City, Fayetteville, Tyrone and Brooks.
Over the first five years of the agreement the percentage will switch as the county’s take dwindles to 48.5 percent and the cities’ share will increase to 51.5 percent.
Peachtree City Councilman George Dienhart applauded the new county commission for helping come to agreement on a more workable deal.
“What a difference a couple of months makes,” Dienhart said, also praising the city’s negotiation team for its work.
City officials were also appreciative of the cooperation received from their counterparts in Tyrone and Fayetteville.
The formula is applied to all sales taxes filed in Fayette County, as they are accounted for on a countywide basis with no way to break out the individual income for each municipality and for the unincorporated county as a whole.
Fayetteville and Tyrone also approved the sales pact Thursday, and the Fayette County Commission is expected to take it up this week at its regular meeting.
The agreement will stave off a lawsuit filed in Superior Court in which a senior judge from outside the circuit was asked to make a final decision, a move that followed failure to resolve the matter in mediation as required by law.
According to Peachtree City Finance Director Paul Salvatore, the proposal will reduce the city’s LOST revenue by about $190,000 in the current fiscal year. The city had budgeted for a reduction of about $160,000.
If sales tax revenues come in stronger than expected, there is a chance the city might not even see a shortfall, Salvatore explained in an email to The Citizen.
“We will monitor it and do a budget adjustment later in the year, if necessary,” Salvatore said.
On the average, the deal will cost the city about $68,000 a year for a total of $340,000 less over a five-year period, Salvatore said in a memo to council members about the LOST agreement.
Had the split remained at 50 percent for the county and 50 percent for the cities, and a pro rata formula used to split the proceeds based on population, the city’s revenue could have decreased as much as $600,000 or more a year, Salvatore noted.