Judge to decide on LOST
By Stephanie Johns
Madison and Morgan County continue to seek agreement on the distribution of Local Option Sales Tax (LOST).
According to Madison Mayor Bruce Gilbert, the city council needs to disucss future actions regarding the distribution of LOST as negotiations with the county have stalemated.
“We need some guidance on where to go from here,” he said.
LOST, a 1 percent sales tax, is levied by the county and distributed among the county and its four municipalities: Bostwick, Buckhead, Madison and Rutledge.
The county currently receives 73 percent of the tax while Madison receives 22 percent, Rutledge receives 4 percent, and Buckhead and Bostwick receive the remaining 1 percent.
The county has proposed they receive 77 percent of LOST revenues, and the City of Madison has proposed that the percentage to municipalites be increased to 51.1 percent; the county initially offered a compromise of a 75/25 split of LOST funds, which the city rejected. Revenue projections have Madison receiving about $780,000 in the current fiscal year, and the county receiving $2.7 million.
Gilbert told council members at their meeting earlier this month that they need to determine what their final offer to the judge will be, as the judge will not be able to offer a compromise.
“He’s going to take one or the other of the options,” Gilbert said. “That’s going to be it.”
City Manager David Nunn said that the city is looking ahead at this point.
“We’re looking forward to the end of the process to get it settled,” Nunn said.
According to Morgan County Manager Michael Lamar, the county's attorney, Christian Henry, filed an action with the Morgan Superior Court on behalf of the county. The county’s next step would be binding arbitration with a judge from out of the circuit.
“This doesn’t mean we won’t still informally negotiate with the city,” Lamar said. “It just means you’re taking the next step.”
Lamar said they had a 60-day window from Aug. 15 until Sept. 14 to file the action.
Henry explained that LOST negotiations must be kicked off by July 1 two years following the census. The county began the initial negotiation period April 17, which meant they had through June 16 for the initial negotiation period.
As the county and the city were unable to reach an agreement during that time, a mandatory mediation period began and ran from June 16 through Aug. 15.
The county then had until Sept. 14 to file its petition in Superior Court, requesting the court to decide about LOST distributions. This petition was filed last Wednesday.
Henry shared that some people have voiced their confusion and concern that LOST funds would expire.
“The current LOST distribution would stay in effect during litigation even if litigation is not resolved by Dec. 31,” he said.
Henry noted that ideally cities and counties agree on the distribution of funds, fill out a certificate specifying who gets what, and send it in to the Department of Revenue.
As to the county’s current petition, Henry said that a judge could rule on it between now and Dec. 31 and that certificate would be submitted to the Department of Revenue.
If a judge requests briefs from each side or a hearing or hearings, though, it may take more time.
Henry explained that the county only has to reach an agreement with a city or cities that make up 50 percent or more of the municipal population.
“In this case Madison makes up that percentage,” he said. “That doesn’t mean the other cities will get left out.”
Henry said that a statute dealing with “absent municipalities” protects them from receiving less than the total percentage of their municipal population.
Printed in the September 20, 2012 edition