Battle lines form almost anytime Fulton County talks money with its northern cities.
This year may be no different as the county prepares to craft a new 10-year agreement over how it distributes about $200 million in sales tax money each year.
At stake: miles of paving, additional police officers and firefighters, parks -- in fact, anything a government might want to use the funds for, including reducing property taxes for the nearly 1 million people who live in Fulton County and its cities.
While most cities would gain millions if the current formula -- based on population -- is kept in place, the county and some south Fulton cities, like East Point and College Park, would take major hits.
Even Atlanta, whose Fulton population inched up slightly since 2000, could lose up to $1 million in revenue because it has not kept pace with growth in other cities.
The negotiations could foreshadow a long year for a county already up to its neck in squabbles with all 14 of its cities. After three years of haggling, the cities have yet to agree on which services they are willing to pay for from the county.
"I would prefer not to have a fight," Roswell Mayor Jere Wood said, "but I expect one."
Local option sales tax revenues are distributed according to a formula negotiated every 10 years between the county and its cities. Under the current arrangement struck in 2002 and adjusted as new cities sprang up, Fulton County receives about 15 percent of the cut. The rest is split among the cities, based on population.
The new formula will go into effect in 2013. Fulton has until July to begin negotiations.
State law allows other factors besides population to be considered in the talks, such as a city or county's debt load, the amount of services it provides and the amount of tax it collects from retailers within its borders.
Wood said he favors splitting proceeds by population. Such a split would benefit Roswell and most other cities, but it could wreck the county government, which is already having to pull $82 million out of reserves this year to fund a budget shortfall.
If the same population-based distribution is implemented next year, the county's share would drop to 9.5 percent, about $12 million less than it gets now.
Fulton Commission Chairman John Eaves declined to comment on the upcoming negotiations, but Commissioner Liz Hausmann, who represents north Fulton, said she thinks population is a fair basis for distributing tax proceeds.
"Neither the county nor the cities can control where people live, but they have to serve those people," she said. "It makes sense that it's distributed in a way that reflects where the population actually is."
As for the county's potential loss in revenue, Hausmann said Fulton needs to get its financial house in order without relying on more than its share from the cities.
Of the four cities formed in Fulton since the last census, Milton may enjoy the biggest gain in its share of the pie. Its annual take could double from $3.7 million now to $7.6 million -- almost half of its operating budget. That's because the city's population more than doubled from an estimated 15,000 in 2006, when it was founded, to the 32,000 reported in the 2010 census.
Both Milton and Johns Creek are under property tax caps, and while neither is hurting, both acknowledge needs. In park-poor Milton, city leaders hope to expand greenspace and recreation. In Johns Creek, it's keeping up with maintenance for its more than 337 miles of paved roads.
If population is the sole factor used to determine distribution, all of north Fulton would come out a winner, said Johns Creek Mayor Mike Bodker. At the same time, he said, he doesn't want to see others get hurt.
"If we arrive at something in the middle, I think that might be a good approach," he said.
Milton's City Council has not called for a distribution based solely on population. Neither has Atlanta, the giant at the negotiation table.
"We don't want to give out our whole position, but we believe there's an alternate methodology that provides a stronger basis for distribution than a population-based allocation," said Jim Beard, Atlanta's chief financial officer.
One of those other considerations, Beard said, is the amount of sales tax Atlanta generates, a factor that should more than offset the city's stagnant population growth.
The idea of distributions based on sales tax collections has popped up even in well-heeled Alpharetta. The city is home to retail dynamo Northpoint Mall and one of the highest commercial tax bases north of Atlanta, and Alpharetta officials have publicly discussed ways to get some credit for what the city contributes to the tax.
As early as last year, then-Councilman Doug DeRito commented at a public meeting that the city should reap a fair share of the reward for investing so heavily in attracting those businesses.
Johns Creek resident Tim Jennette agrees. "I think the money should stay in the areas in which it was generated," he said. "One area should not benefit off another one's prosperity."
At the other end of the scale are College Park and East Point, both with double-digit dips in population and budget strains.
College Park, whose Fulton population fell 32 percent, eliminated some 20 positions and initiated early retirement options to help balance its 2012 budget.
Councilman Ambrose Clay said the city is reviewing a five-year financial outlook that shows further need to draw on reserves.
"We're not in dire straits like some of the other cities, but we need to prevent this trend from continuing," he said.
A more immediate crisis looms in East Point, where a proposed cut in water rates will create a $7.5 million drop in revenue. Tack on another $1.5 million loss in sales tax revenue next year, and you have the makings of a disaster, Mayor Earnestine Pittman said.
"Some of the smaller cities have certain industrial areas outside their limits, but yet the cities are responsible for the roads and upkeep to help support those areas," Pittman said. "There is no way we're going to go with dividing the money up based on population."
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Distributing Fulton County’s sales tax money
Since 2000, some cities in the county – mostly in the north – have seen big jumps in population. Others have seen population numbers decline or remain flat. These counts are important because tens of millions of local option sales tax dollars are distributed to cities based on population data. Increases usually mean more cash for the cities’ coffers. Population slumps, however, could mean the loss of much-needed cash.
Population 2013 distribution
(within Fulton Co.) (based solely on pop.)
2000 2010 Distribution Distribution
based on pop. change
Alpharetta 34,854 57,551 $13,494,488 $2,217,483
Atlanta 386,699 391,711 $91,847,915 ($703,307)
Chatt. Hills* -- 2,378 $557,591 ($19,146)
Col. Park 18,810 12,670 $2,970,846 ($1,533,438)
East Point 39,595 33,712 $7,904,748 ($1,576,762)
Fairburn 5,464 12,950 $3,036,500 $1,727,995
Hapeville 6,180 6,373 $1,494,333 $14,453
Johns Crk* -- 76,728 $17,991,087 $2,951,701
Milton* -- 32,661 $7,658,311 $3,976,229
Mtn. Park 496 526 $123,336 $4,685
Palmetto 3,073 4,188 $981,997 $246,150
Roswell 79,334 88,346 $20,715,262 $1,717,465
Sandy Sps** 85,781 93,853 $22,006,536 $1,472,285
Union City 11,621 19,456 $4,562,019 $1,779,191
Fulton Co. 229,880 87,478 $20,511,734 ($12,274,984)
(Unincorp.)
816,006 920,581 $215,856,704
*Cities incorporated in 2006 ** Sandy Springs was an official “designated area” in 2000 but did not incorporate until 2005. Sources: Staff research, City of Roswell
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