Atlanta and College Park sign tax deal in final hours

Atlanta Mayor Kasim Reed has signed on to a deal divvying up local option sales tax revenue with Fulton County and its cities, averting the risk of losing $240 million in annual revenue countywide.

Atlanta and College Park were the holdouts in the deal backed by Fulton County and 12 other cities, a plan that reduces Atlanta’s annual share by $5.8 million per year over the 10-year life of the tax. The city’s annual share of the tax revenue now will be $96 million.

Leaders from north Fulton played a large role in the plan, which gives Northside cities millions in new revenue to help fund their services and keep taxes down.

Reed and College Park Mayor Jack Longino signed the deal Thursday, ahead of a state-imposed deadline. Had they not signed and given Fulton County a unanimous agreement, collection of the county’s 1 cent per dollar sales tax could have been at risk, state attorneys had warned.

“Hopefully, it seals the deal,” Fulton County Commission Chairman John Eaves said.

LOST funds, a pot of money fed by every sales purchase across the county, are meant to lower property taxes. The county and local governments use the money for many services: to hire police and firefighters; pave roads; keep libraries open; and fund health, senior and youth services.

The last-minute agreement comes after the Georgia Supreme Court struck down last week a provision in state law designed to force governments to work together on a plan for sharing the money or else have a Superior Court judge do it for them.

That effectively nullified deals counties reached under that provision and sent Fulton and 16 other counties scrambling to submit a new LOST plan to state revenue officials by the end of Thursday — the last day any government could challenge the Supreme Court decision. State revenue officials ordered counties to finalize a plan by that deadline. While Fulton’s deal was not decided in court under arbitration, Atlanta officials had planned to argue for a larger share of the revenue before a judge in November.

A statement from Reed’s administration said the city signed on to the deal because “the uncertainty created by the recent Supreme Court decision could cause even greater harm to the city, should the Georgia Department of Revenue determine that no tax should be collected. Further, the mayor is confident that Atlanta’s growing economy will mitigate any reduction in Atlanta’s share of the LOST proceeds.”

Others in the county worried that if Reed, perturbed that Atlanta came out a loser in the deal, withheld his signature, it could put LOST collections in a state of legal uncertainty. Complex litigation, they feared, could force an end to the sales tax, making purchases cheaper countywide but putting every property owner at risk for tax hikes.

Atlanta officials long have argued against dropping the city’s share from 43 percent to 40 percent — in part because Atlanta’s daytime population swells with workers from elsewhere, and it also is home to several government agencies and academic institutions that do not pay property taxes.

In the end, though, the deal won the support of all 15 of Fulton County’s disparate governments, which few expected a year ago during tense negotiations.

“It’s amazing,” said Sandy Springs City Attorney Wendell Willard, who is also the state representative who sponsored the measure struck down by the high court. “We feel much better now. We really do.”

The signatures from Reed and Longino put an end to a protracted process that had cities pitted against the county, and one another.

A dozen cities from Sandy Springs to Palmetto joined together to form a majority coalition, and city officials say Reed found himself outmaneuvered in his attempts to gain an upper hand in deciding LOST shares.

The 12 cities that joined with the county initially included College Park.

The north Fulton cities, seeking a coalition representing more than 50 percent of the county’s population, had agreed to give College Park and East Point larger tax shares in exchange for their cooperation.

However, Atlanta urged College Park to drop out of the coalition. Longino wouldn’t specify College Park’s reasons for doing so, other than to say his city has far more interests entwined with Atlanta than other municipalities.

“I’d rather have the 12 cities mad at me than Atlanta,” Longino said.

The other cities then went to Fairburn — which was sitting out the fray — and offered it part of College Park’s cut, bringing them into the fold and restoring their majority.

Fairburn, under the deal, will now get about $3.5 million per year, which is $350,000 per year more than it would have received before joining the 11 other cities.

Switching teams cost College Park about $650,000 per year. Longino said the city will have to live with its decision.

“College Park will be fine,” the mayor said, adding the city could even do without its share altogether. “I’m not telling you we want to do without it, but we could.”