Cumming, county can't work out sales tax dispute
Forsyth stands to lose millions in SPLOST money


The Atlanta Journal-Constitution
Published on: 05/07/08

Officials with the city of Cumming and Forsyth County were unable by late Tuesday to hammer out a deal to try to salvage the county's special purpose local option sales tax, or SPLOST, and millions of dollars in potential revenue.

Barring some major turn of events, that likely means SPLOST collections in the county will cease June 30 and not resume until April, at the earliest.

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In the interim, the county — which has had a SPLOST since 1988 — could lose between $21 million and $36 million in sales tax money, depending on the economy.

Shortly after 5 p.m. Tuesday, Cumming Mayor Ford Gravitt said the county, in two days of back-and-forth negotiations, rejected two offers that would have kept sales tax collections on track.

He said the city Monday asked for 11 percent of the proceeds and, when that was rejected, came back with an offer of 9.98 percent, or about $20 million, of a potential $275 million in SPLOST collections.

"Certainly, we'd like to resolve this. But the county has shown lots of bad faith," Gravitt said.

When a five-year extension of the tax was approved in February, the city had been set to receive 4.29 percent, or about $11.7 million, of the proceeds. But last week, acting on a lawsuit filed by the city, a Superior Court judge ruled the election invalid and barred the county from collecting any SPLOST money after the current tax expires June 30.

County officials have not decided whether to appeal the judge's ruling.

Commission Chairman Charles Laughinghouse, who has headed the negotiations for the county, said late Tuesday he still may have another offer to make to the city.

"I can't say it's over," Laughinghouse said. But he added: "I'm not optimistic."

He said Gravitt started out asking for 10 percent, then went to 11 percent. "That's playing a game, and I'm not ready to play a game anymore," Laughinghouse said.

The mayor said area legislators and Lt. Gov. Casey Cagle's office had been urging the city and county to come to an agreement.

County Commissioner Brian Tam said earlier in the day that it was critical that the two sides come to an agreement. "Seventy percent of voters said they want it, and, for that reason, everybody is obligated to find some common ground."

The mayor said there was pressure to reach an agreement before Wednesday, the date set by the judge for attorneys to file an official order in the lawsuit.

Officials also said Tuesday was the deadline to let the state know whether merchants should be notified to discontinue collecting the tax as of July 1.

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