Fulton County's strained relations with its cities could intensify soon as they hash out how to split up billions of dollars in sales tax money over the next decade.
The new formula for distributing local option sales tax revenue, which will be decided in the coming months, will affect nearly 1 million people and some of the state's largest cities.
In play is roughly $220 million per year, a pot filled with every swipe of a credit card or ringing of a cash register. LOST funds are meant to go back to taxpayers by keeping property taxes down, helping to pave roads, pay police, maintain parks, fund libraries, and support arts and social services.
But not everyone gets the same share under the formula that the county negotiates with its cities every 10 years. Fulton has witnessed significant change since the last agreement was hammered out, with the creation of four new cities that have drawn from its resources and challenged its authority.
Who will benefit most from the new round of talks will drive what's expected to be a contentious series of meetings mapping out the future of a politically and geographically fractured county.
The County Commission launched the negotiations earlier this month, and city leaders are already reaching out to one another, hoping to form a united front against the county.
If a deal isn't reached in two months, the matter goes to mediation. If mediation fails, a Superior Court judge could make the call, picking one side over the other with no room for middle ground.
"It's going to be a tug of war," Commission Chairman John Eaves said. "Everybody's not going to be satisfied, but hopefully it could be something where all the citizens of the county will benefit."
Population is only one factor in producing a formula. State law also allows negotiators to weigh a city's or county's debt load, the amount of services it provides and the amount of tax revenue it collects from retailers within its borders.
During the negotiations, Fulton will make a case for its significance in the overall operation of local government, providing services that benefit everyone, such as the criminal justice system, libraries and health services. Fulton will argue its population should be considered 920,581 — the whole county.
Others disagree, and legislation has diminished the county's LOST proceeds from 35 percent of the total in 2002 to about 15 percent currently, as the new cities and major annexations devoured most of its unincorporated area. Last year, the county received about $34 million from LOST, second to the $96 million — or 43 percent of the money collected — distributed to Atlanta.
Eaves said the county's share should be somewhere between 35 percent and 15 percent.
Johns Creek Mayor Mike Bodker said the county should get between 15 percent and 9.5 percent — the population share of unincorporated south Fulton. That would cost the county more than $12 million per year, and Bodker said if that caused a countywide tax increase, it would also put a spotlight on wasteful spending.
"The solution involves Fulton County recognizing that we're in a different world today than we were 10 years ago when this discussion was last held," he said.
Making the tight deadline could be difficult given a history of discord between the county and its 14 cities, including the four that formed through referendums during the past decade — Chattahoochee Hills, Johns Creek, Milton and Sandy Springs.
How the money is distributed could make or break some Southside cities left reeling from the recession and shrinking property values. At the same time, it could boost the newer cities that feel they have been shortchanged.
The biggest player will be Atlanta.
Over the past decade, the city's Fulton County population grew at a slower pace than many of the other cities, particularly in north Fulton. Under a formula based solely on population, it could lose almost $1 million per year.
But that isn't likely to happen without a fight. Atlanta Chief Financial Officer Jim Beard said earlier this year that the city plans to show it generates more tax money than it receives.
Midtown resident Mary Madden, who has urged the county to make cuts instead of increasing the tax rate, said she would rather her sales taxes come back to her through Atlanta's government.
"They're not going to make tough decisions," she said of the county. "They're going to threaten everybody with a tax increase. It's like a bully."
Milton, which incorporated in 2006, could see its share double if population is a dominant factor. The north Fulton city now receives about $3.7 million a year based on 15,000 residents. But the 2010 census set its official population at 32,000.
At risk are the Southside cities of College Park and East Point, which have suffered deep declines in population and property values since the last negotiations.
East Point's $10 million allotment in 2011 represents about a third of the current operating budget for a city where property values have plummeted 36 percent since 2008. Under the current formula, East Point's updated population figures would cost it about $1.5 million per year.
"The mayors of south Fulton have been meeting, and we are comfortable we are not going to lose money just based on our population," East Point Mayor Earnestine Pittman said. "It is very important that we get as much as we possibly can get."
Bodker said he wants Johns Creek to get a fair share, but he's not willing to destroy other cities to get it. He said he prefers beginning negotiations with each city starting at the same amount it currently receives and with Fulton accepting a smaller share to reflect its reduced role in governance.
"If you take some of these smaller cities in south Fulton, who mathematically get a smaller number, it's even more meaningful than it is to a Johns Creek because we have the ability to make it up if we lose some," he said. "Not that I expect to lose any."
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