A DeKalb County task force is evaluating changes to a tax that distributes more money for improvements in cities than in the rest of the county.
The Government Operations Task Force heard options Thursday for overhauling the 1 percent homestead option sales tax, known as HOST.
The sales tax has been around since 1997, and most of its proceeds are returned to homeowners by reducing their property tax bills.
But the tax also pays for infrastructure upgrades, and almost all of that money goes to projects in cities rather than for upgrades in unincorporated parts of the county.
Of the 20 percent of HOST revenue intended for capital improvements, cities will receive 93 percent of that money in 2014, leaving 7 percent for the rest of the county, where more people live, according to a presentation by Joel Gottlieb, the county’s former chief financial officer.
If more areas — such as Briarcliff, Lakeside or Tucker — become cities next year, they would also receive a share of those funds, meaning even less would be spent in unincorporated DeKalb. The city’s distribution of the tax is set by a complicated formula that originated before new cities like Dunwoody and Brookhaven formed.
“The county (is) at a disadvantage for doing anything in that larger area in the lower half of the county,” Gottlieb said.
Of the $105 million in HOST proceeds collected last year, $84 million will go toward property tax relief, leaving $21 million for capital projects. From that $21 million, all but $1.5 million goes to DeKalb’s cities.
Bill Floyd, the former mayor of Decatur and a member of the task force, suggested finding other ways to fund improvements.
“The price we pay is potholes, and we don’t have money to spend on them,” he said.
Potential changes could include replacing HOST with a sales tax specifically for capital improvements, increasing the amount that goes toward infrastructure or changing how the tax is distributed.
The task force is charged with trying to solve some of DeKalb’s most pressing issues by the end of the year. It is reviewing cityhood, taxes, pension liabilities and the county’s government structure.
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