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State wants to withhold tens of millions in grants from Fulton County

The state Department of Revenue has told Fulton County it intends to ask Georgia’s treasurer to withhold state grant money, a move that could cost the county tens of millions of dollars.

Attorneys for Fulton have asked a judge to prohibit the letter from being sent, saying the move would “jeopardize essential services provided by Fulton County with State assistance to some of the most vulnerable and underserved residents within County and the State’s population.”

“The failure to grant the injunctive relief sought will result in severe and irreparable harm to Fulton County,” a court filing said.

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The standoff over state money is part of a dispute between Fulton County and the revenue department over whether Fulton was able to freeze 2017 residential property values at the previous year’s levels. The state has maintained that the county’s move was illegal, and has refused to approve the 2017 or 2018 tax digests. Fulton has taken the department to court to try to force the approval.

In court filings, the county said the move to withhold “grant monies that are necessary for the balancing of Fulton County’s budget” could affect dozens of grants that fund everything from workforce development and child support enforcement to HIV intervention and violence against women initiatives.

“The grants in question are not amounts that sit in a fund and collect interest,” the filing said. “They are amounts that have been allocated for the provision of services and programs. …Without this funding, employees will not be paid, and services will not be rendered.”

Sharon Whitmore, the county’s chief financial officer, said $23.5 million would be at risk as of the end of August, though the court filing said the figure is more than $32.9 million. The county has 31 state grants and 21 federal grants that flow through the state. There are some grants, the filing said, that have not yet been calculated.

A spokesperson for the county said she had no additional comment on the dispute. A spokesperson for the Department of Revenue did not respond to requests for comment.

Fulton County Chief Financial Officer Sharon Whitmore sits with Fulton County attorneys in the courtroom of Judge Alan C. Harvey at the DeKalb County Courthouse in Decatur. Whitmore said more than $23 million could be at risk if the state is allowed to withhold grant money. (ALYSSA POINTER/ALYSSA.POINTER@AJC.COM) AJC FILE PHOTO (The Atlanta Journal-Constitution)

In August, revenue commissioner Lynnette Riley told the county in a letter that she intended to write to the treasurer in October, unless Fulton submitted “a proper county tax digest for 2017 for review as required by state law.” The law says the treasurer shall withhold grants to counties until a tax digest has been submitted.

The county has maintained that it did submit its digest, though its action in freezing values has been disputed.

In court earlier this month, an attorney representing the department, Alex Sponseller, said the letter had been delayed until after the Nov. 13 hearing. Fulton County attorneys filed a request for an injunction to keep the letter from being sent at all. Wednesday, Deputy State Treasurer Scott Austensen said he had not yet seen a letter regarding Fulton County’s grants; DeKalb County Judge Alan Harvey asked that it not be sent until he ruled on the injunction request.

In their request, Fulton attorneys said Riley “is overstepping her authority” in trying to affect the distribution of grant money. Sponseller said in court that he thought the injunction should be denied.

“It’s merely a letter,” he said of the revenue commissioner’s plan. “No funding is involved here.”

THE STORY SO FAR

Previously: In 2017, Fulton County leaders decided to freeze most residential property values at 2016 levels. Residents had complained about huge jumps in their assessments and county commissioners questioned the accuracy of the values.

The latest: Fulton County has twice gone to court to get a temporary order that let the tax commissioner collect property taxes while the dispute is ongoing. Additionally, the county filed a request to force the revenue commissioner to approve the tax digest.

What’s next: The threat to withhold grant money came about as a result of that litigation.

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