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March 10, 2010

AG: State must hand over $18 million to local governments

From staff and wire reports Dalton Daily Citizen

DALTON — Georgia’s top lawyer says the state must hand over $18 million in disputed sales tax revenue to local governments in the midst of a crippling state budget crunch.

The opinion from Attorney General Thurbert Baker was obtained by The Associated Press.

A spokesman for Gov. Sonny Perdue was critical of the opinion, and said Wednesday the office was analyzing the decision. He declined to say whether they would comply.

But county officials who are grappling with economic woes of their own praised Baker’s opinion which they say could hand them some badly-needed cash.

Mike Babb, chairman of the Whitfield County Board of Commissioners, said he did not have much information about the ruling.

“That’s great news, now where is our check?” Babb said with a laugh.

He hoped to learn more from the Association County Commissioners of Georgia, which represents county governments throughout the state. The organization called the ruling an “important official opinion in favor of local government.” Any extra money from the state would be welcome for Whitfield County, which is facing a budget crunch of its own.

“Every little bit helps,” said Clint Mueller, legislative director for the Association County Commissioners of Georgia.

Baker delivered the 15-page opinion to Lt. Gov. Casey Cagle, who had sought legal advice on who had rights to a pot of “unidentifiable” sales tax revenues.

At issue are sales taxes collected by the state without clear information about which local government they belong to. Typically, Georgia collects sales taxes from merchants and then distributes a portion back to the appropriate local government. But some of the sales taxes arrive in state coffers without the information needed to determine which county they belong to.

Under state law, the revenue commissioner divvies up those “unidentifiable” funds between local governments.

In 2008, however, the state law handing state revenue Commissioner Bart Graham that authority expired. When the state law was enacted again in May 2009 it was unclear what should become of the roughly $18 million in “unidentifiable” sales tax revenues that had accumulated during the 16-month gap.

Jaillene Hunter, a spokeswoman for Cagle, said he asked Baker for guidance last July “in order to prepare for budget discussions and to receive clarification on the pot of local government sales tax dollars.”

But Perdue spokesman Bert Brantley suggested the law was clear. Lawmakers could have made the law retroactive “and chose not to do that,” Brantley said.

“This opinion from the attorney general appears to be an attempt to speak for the legislature rather than applying the plain language it passed last year,” Brantley said.

The decision comes as the state is scrambling to fill what is shaping up as another $1 billion shortfall for the fiscal year that begins July 1. This week state money managers reported that tax collections are down for the 15th straight month.

County governments likewise have been hit hard by the economic downturn, pummeled by declining property tax revenues.

Baker is a Democratic candidate for governor. Cagle, a Republican, is seeking re-election.

 

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