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Is SPLOST Lost?
Originally Published May 7, 2008, 12:17pm
(Updated May 7, 2008, 6:58pm)
Within hours of last weeks legendary ruling that the 20 year run on sales tax revenue via Special Purpose Local Option Sales Tax (SPLOST) would be suspended, the two sides were scheduling discussions to come to an agreement, but as of this writing it appears Forsyth County will roll back to a 6% sales tax beginning July 1st, 2008
The SPLOST collection extension was suspended due to a technicality in the ballot language, but the real motivation is much simpler than that. The City and the County cant reach an agreement on how to split the money.
According to state law, SPLOST revenues can be split one of two ways 1) via an intergovernmental agreement between the 2 parties, or 2) failing any agreement, a pro rated split by population. Since the majority of the citizens of Forsyth County live outside the city, a population split would put the city's portion of funds at approximately 4.3%. This is less than 1/3 of what the city has received in the past, but failing to reach an intergovernmental agreement prior to the vote in February, this is exactly what the city was set to receive. Due to a previous intergovernmental agreement, the city continues to receive 15% of another sales tax known as Local Option Sales Tax (LOST) which is not set expire until 2012.
The City of Cumming, not willing to accept the 4.3% split of SPLOST VI, hosted an organizational meeting to oppose SPLOST VI on the February ballot, and sued the county over a technicality in the ballot language. Although SPLOST VI was approved by a margin of 70-30, the city won thier lawsuit regarding the ballot language last week, effectively throwing out the measure and forcing a new vote. The city has the right to withdraw its complaint if the 2 sides reach an agreement, or the measure would need to be put before the voters again.
With no time left to hold another election before SPLOST V expires on June 30th, the City and County have once again been in negotiations on the split of the funds. Several offers were made from the city in the neighborhood of 10%, an amount that was rejected by the city in pre-election negotiations. Counter offers were made by the county in the neighborhood of 7%, and rejected by the city. The gap between the 2 sides is only about $10M, but as of this writing, no agreement has been reached, and letters will be mailed to merchants this week from the Department of Revenue with instructions to change sales tax to 6% rather than the current 7% effective July 1, 2008. Since there are still some options available, the Department of Revenue has elected to send the letters with a note to check their website for updates in case something changes. A 1% reduction in sales tax will result in lost revenues for both parties of over $2M per month over at least 9 months, or until a new ballot measure can be passed, and a new SPLOST can be implemented.
As a result of the lost revenue, the county must find other sources to fund over $218 million in road improvements the SPLOST VI revenue had been earmarked for, as well as $7.2 M for public libraries, $17.8M for Public Safety Improvements, $13.5M for Parks and Recreation, and $6 M for Cultural Activities. Click HERE for a full breakdown of projects
Options available include a new SPLOST and / or bond measure on the November ballot, but there will be no way to replace the nearly $3M per month in revenues the county will lose every month the SPLOST is not in effect. The difference is that bonds are paid via property tax increases, while SPLOST is paid via sales tax.
A likely scenario will be a vote for a Bond in November for road improvements, and a SPLOST for major projects in the city such as a new Jail and Courthouse.
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Comments
13 comment(s) on this page. Add your own comment below.
I don't know about most folks, but seeing a 60+ old man sucking his thumb and crying over spilled milk is embarrassing. The Mayor of Cumming doesn't get his way at the beginning of SPLOST VI so he throws a tantrum and screws not only the residents of his precious city, but also the entire county. Now he wants to take the 10% that was offered in the first place!?!?? I sure am glad that the Avenues opened so I can spend even less in the City Limits. I urge as many county residents that can to do the same.
I have to say I cannot agree with smj.
It's sad that some people have bought into the rhetoric and lies of one commissioner. Both sides could have done a better job dfrom the beginning and we have been failed by all.
Remember that on election day.
Yes, remember this on election day. They should have all negotiated and talked like Grown Adults instead of throwing tantrums and abusing the court system.
Marc, I haven't bought anything, I am just commenting on this article.
The way I see it, the Mayor was used to getting a large sum of $$$ from prior commissions that he had favorable relations with. A new commission is seated w/out his favor, it votes to not give him the largess he is used to, he gets upset. One can glean from the above article (city's portion of funds at approximately 4.3%. This is less than 1/3 of what the city has received in the past) that the county offered about 2/3 of what the city usually got with the 10%. What's wrong with that?? That is 5.7% more than what the county is required by law to give the city.
Hmmm. Is this greed or an impetuous child throwing a fit?? Then we have the vote. I don't know the number of county/city residents that voted but 70% say yes, we agree with $$$$ split between the county and city, along with the projects to be funded. Sounds like the people have spoken.
However, the Mayor doesn't like what the people want, so he blows it up over a technicality. And like you say Marc, everyone now loses.
My first question is what has all the money the city has rec'd in the past gone for? Yes, the city is clean but with the money they have rec'd in the past one would think that the city would sparkle and shine.
The mayor is fighting for every dollar he can get for his constituents. Hang him!
Incidentally, I don't know who wrote the article above, but a Superior Court judge apparently didn't consider failure to list projects to be funded as a mere "technicality."
Oh, Mr. Wheeler! You say that there's NO problem with the mayor fighting hard to get every dollar for his constituents, but you seem to have a problem with county commissioners who fight hard for every dollar for THEIR constituents.
You're a shill for the city, plain and simple.
This county's government is in shambles. Not just SPLOST, but also the budget.
smj, my experience with the mayor over the years supports your comments. I think your comments are very much on target.
There is no legitimate reason to give the city more than the state required population percentage. I don't see any city needs more pressing than identified county needs.
Commissioner Richard, here is what I have a problem with: First you practically dare the city to file this lawsuit, claiming they will be laughed out of court. Well, who's laughing now?
Then, immediately following the judge's ruling you say the county will appeal to the state supreme court. The very next day you say the county won't appeal the ruling. Then yesterday you send an email to Patrick Bell, your opponent in the Republican Primary, stating the county will appeal. What's it going to be commisioner?
The problem I have is with a commissioner who changes his position on the issue every 24 hours.
To smj:
Just curious, smj, but if you're embarrassed by watching a 60+ year old man suck his thumb and throw a tantrum, are you also embarrassed by David Richard who said immediately following the judge's ruling that the county would appeal to the state Supreme Court. Then said the next day the county would not appeal. Then said yesterday they would appeal.
Now, that is embarrassing behavior! Don't you agree?
With the way Dave Richard pops off at the mouth every 2 seconds, he does not deserve to be in office again in my humble opinion. He changes his mind as often as the direction of the wind changes.
Dale, it's not pretty.
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