Fulton County, cities head to arbitration over LOST distribution

Fulton County and its cities are headed for arbitration over how to split up more than $220 million a year in revenue from a local option sales tax, or LOST.

The two sides failed to reach agreement last week in a last-ditch effort to adopt a formula that would allocate the revenue over the next 10 years.

Under arbitration, a Superior Court judge must decide which, among as many as three proposals, will be implemented.

While the cities have struck the pose of unity throughout the negotiations, a rift has developed between some of the big cities with large retail bases and the smaller cities that lack the same commercial punch.

That has left the young city of Milton in a quandary.

Earlier this week, its City Council voted to join a majority of the other cities to hire attorney Andrew Welch to represent their interests. But the resolution also carried language that it could pull out of the consortium and declare itself “absentee.” A declaration of absentee means the city is proposing that sales tax revenue be distributed on the basis of population.

Milton would likely fare best with such a distribution. Compared with most of its neighbors in north Fulton County, it has a paltry commercial presence. On the other hand, its population has doubled to more than 30,000 since its current share of sales tax revenue — producing about $3.7 million annually — was set in 2006, the year it incorporated.

State law requires negotiators to consider a number of factors in reaching an allocation formula. They include population, sales taxes generated, services provided and need.

Already, some cities have broken ranks. Atlanta has hired its own attorney, and East Point Mayor Ernestine Pittman has said the city plans to declare itself absentee.

Other cities in south Fulton, she said, are considering a declaration of absentee, as well, because they don’t have the retail sales to compare with Atlanta and most of the north Fulton cities.

Support real journalism. Support local journalism. Subscribe to The Atlanta Journal-Constitution today. See offers.

Your subscription to the Atlanta Journal-Constitution funds in-depth reporting and investigations that keep you informed. Thank you for supporting real journalism.