Coweta County and its municipalities are in the midst of discussions over how to divide the proceeds from the Local Option Sales Tax.
The LOST is one of three local one-percent sales taxes imposed on purchases made in Coweta County. The other two are the Special Purpose Local Option Sales Taxes that benefit Coweta County and the Coweta County Board of Education.
The LOST distribution formula must be revisited every 10 years. Its purpose is property tax relief.
The first — and possibly last — formal meeting on the distribution formula will be held on Aug. 16.
The meeting is open to the public. It will begin at 6 p.m. and will be held in the county commission chambers on Perry Street.
The new formula will take effect Jan. 1.
“State law requires the county to initiate renegotiation by July 2, 2012, which we did,” said Patricia Palmer, Coweta’s public affairs director. “We will have a called meeting on Aug. 16 to complete the negotiations.
“This will be our first formal meeting and every qualified city has been invited to attend. There have been meetings with the cities already to discuss the distribution proposed,” she said.
Coweta’s LOST has been in place since 1979. It is divided among the county and “qualified” municipalities. To be a qualified municipality, a city or town must impose taxes and must provide at least three governmental services. All Coweta municipalities except Moreland receive a portion of the LOST.
“The proposed split uses a formula that was established in 1994 and used in 2002 as well,” said Palmer. “It looks at population and has consideration of the other criteria.”
There are eight criteria that, under state law, can be used in determining the distribution of LOST proceeds.
They are: service delivery to the population, service delivery to the resident population, service delivery responsibilities of each political subdivision, distribution charges and debt obligations, point of sale, intergovernmental agreements, tax equity and double taxation, and service delivery city/county plan.
Newnan is seeking an increase in its portion of the LOST proceeds. Currently, the city receives 21.89 percent of the tax. The city is requesting an incremental increase, with the rate being 25.95 percent in 2013, 28.57 percent in 2014, and 31.19 percent from 2015 to 2022, according to Newnan City Manager Cleatus Phillips.
Last summer, the Senoia City Council voted to have discussion of the county/city service delivery strategy be a part of the LOST negotiations.
Service delivery refers to which services are provided in what areas of the county by what government. Senoia Mayor Robert Belisle said that Senoia residents were being unfairly taxed by the county for services that are only provided to residents of the unincorporated areas. The city hired a consultant to do a tax equity study to gain more information about the issue.
“I think the study provided good information about how serves are provided and funded in the incorporated and unincorporated areas,” Senoia City Administrator Richard Ferry said Friday. “However, we would have to go much further to provide information that would be more helpful in LOST negotiations,” he said.
Sept. 1 is the deadline for the cities and the county to come to an agreement.
If there is no agreement, the next step is mediation or non-binding arbitration.
