Whitfield, Dalton still divided on tax talks

It looks like the first phase of talks on how to divide Whitfield County’s Local Option Sales Tax (LOST) will end without an agreement between the county Board of Commissioners and the Dalton City Council and without any further meetings scheduled between the two governments.

“I’m not sure there’s anything to be gained (from meeting again). We know what the numbers are. We’ve made our position clear, and they’ve made their position clear,” said Board of Commissioners Chairman Mike Babb.

The county sent a letter to the cities in the county to start the LOST negotiations on June 28. They have 60 days from that date to reach an agreement. If they don’t, they will go through 60 days of non-binding arbitration.

Babb said the board has asked the county attorney to contact the city’s attorney about selecting an arbitrator.

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.

The groups met in July for the first discussions about how to split the 1 percent LOST. State law requires that agreement to be renegotiated every 10 years after the results of the latest census are in.

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.

Commissioners presented a plan that would split the money for the next 10 years with 69.74 percent to the county, 27.55 percent to Dalton, 0.55 percent to Cohutta, 0.71 percent to Tunnel Hill and 1.45 percent to Varnell.

Dalton officials responded with a proposal that the city get 45 percent of LOST dollars and the county 50.967 percent, with the rest split between the county’s smaller cities.

Commissioners returned with a new proposal that would give 67 percent of LOST funds to the county and 30 percent to the city of Dalton, with the rest divided among the three smaller cities. That was the latest formal offer made by either side.

Both sides had 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 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.

Last year, a state Superior Court judge found in favor of 15 cities that had sued Gwinnett County, ruling their residents don’t have to pay taxes to fund services that primarily benefit residents of unincorporated Gwinnett County. 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.

“We would basically set up two different property tax rates, one for county residents outside the city of Dalton and one for those inside the city. That would mean city residents would pay a lower county tax. Right now, they are paying equal,” Babb said.

He says that, based on the county’s best estimates, those special tax districts will mean that the county government’s property tax will be about 1.8 mills higher outside the city of Dalton than inside the city.

Dalton officials want additional services, including the county’s share of recreation department funding, to be funded out of special tax districts.

“The city recreation department has been open to all county residents longer than the county recreation department has, and we provide a lot more recreation to county residents than their county recreation does, and they charge all the participants in the county recreation department. We charge the adults, but we do not charge the children,” said Dalton Mayor David Pennington.

The sides have agreed to merge the city and county recreation departments and appoint an authority to run the combined service, but commissioners have so far rejected putting county recreation funding in a special tax district.

“(The Service Delivery Act) and court cases support the county viewpoint,” Babb wrote in a response to the city’s proposal. “City residents are part owners of county recreational facilities; county residents are not part owners of city recreational facilities. Our long-term goal should be to completely join the two under the authority with one funding method, probably county wide.”

Both sides have also agreed in principle that the county will cede its half of the Northwest Georgia Trade and Convention Center to the city, which will assume financial responsibility for the facility.

“That takes a half-million-dollar-a-year liability off their hands,” Pennington noted.

Pennington said he is disappointed the two sides have not had more public meetings to resolve their differences.

“I’m beginning to wonder if they are going to negotiate in good faith,” he said.

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Whitfield, Dalton still divided on tax talks

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