Fulton sales tax talks off to a bumpy start

Negotiations between Fulton County and its cities are off to a turbulent start as the heads of 15 governments began to hash out how to divvy up billions of dollars in sales tax money over the next decade.

The county's 1-cent local option sales tax, paid by anyone who spends money in the state's largest county, brings in roughly $220 million per year. The money is meant to go back to taxpayers by offsetting property taxes and helping pay for roadwork, police, parks, libraries and social services, among other things.

The negotiations are to decide how that money gets returned — through the county government or through taxpayers' respective cities. Losers could find themselves forced to raise tax rates.

City and county leaders have pledged not to speak publicly about the talks, which began last Tuesday, but an internal county memo obtained by The Atlanta Journal-Constitution portrays a rocky first meeting.

Thirteen cities — all but Atlanta — presented a united front, saying they agreed that all of their shares should increase or remain the same and that Fulton should cut its percentage to make that possible. The county share, the cities determined, should be cut from the current 15 percent to as low as 10 percent, which would translate to about $12 million less per year, according to the memo.

Atlanta Mayor Kasim Reed, whose city currently gets the lion's share of the distribution with 43 percent ($96 million last year) balked, claiming the county had not sent any elected officials to the negotiating table. County Manager Zachary Williams chaired the meeting.

Reed, according to the memo, said the county must provide someone who can make a binding agreement.

Fulton County offered no proposal on a distribution formula at Tuesday's meeting. The cities said that by the second meeting next Tuesday, the county must offer specifics, but Williams said that was unlikely.

All sides have until the end of August to agree on a formula or the matter will go to mediation. If mediation fails, a Superior Court judge could make the call.

By state law, negotiators must consider a number of factors in the distribution, including population, budgetary needs and the amount of sales tax collected within a jurisdiction.

At a briefing last week, Paul Radford, deputy director of external affairs for the Georgia Municipal Association, told Johns Creek officials to come prepared because Fulton County "may try to divide and conquer."

Roswell Mayor Jere Wood said there are really two negotiations going on: one between Fulton County and the cities, and another between the cities themselves.

"Let's try to get as big a pie as we can before we start fighting over our pie," Wood said.

East Point Mayor Ernestine Pittman has worried her city could lose some of its $9.5 million average annual allotment because its population declined 15 percent over the past 10 years. She said she's more at ease now.

"It's advantageous to all of us not to have a city pulled down because of its size or its lack of point of sales," she said.

Fulton Commission Chairman John Eaves said he might attend the next meeting himself. Facing a deficit this year, the board just voted down a 5 percent increase in the countywide property tax rate, opting to tighten spending instead.

While many city leaders say the county's sales tax share should be minimal because it directly governs less than 10 percent of the population, Fulton counters that its services, such as courts, libraries, senior centers, health services and the county jail, benefit everyone.

"Obviously, the more revenue we retain going forward, the better," Eaves said. "There's going to have to be some give and take on all parts."