The city of Atlanta, in cooperation with Fulton County and many of its sister cities in the county, have been working to reach an agreement regarding a distribution of the Local Option Sales Tax (LOST) proceeds within the county.
Local governments have long used LOST revenue to help offset ad-valorem taxes in their communities. Unlike the Special Purpose Local Option Sales Tax (SPLOST), which is limited to capital spending, LOST revenue can be used for operating costs.
During Wednesday’s special called meeting, Mayor Kasim Reed briefed the council on the current status of LOST. The LOST certificate had to be submitted to the Georgia Department of Revenue Thursday by 4:30 p.m.
The original LOST law, passed in 1975 and amended in 1976, established the LOST as a 1 percent county sales tax shared with cities based upon population. In 2010, the General Assembly further modified the renegotiation process for LOST sharing revenue by implementing a “baseball arbitration” amendment — a contingency in the event a county and its municipalities cannot agree upon a distribution formula.
The “baseball arbitration” process essentially put the renegotiation process before the superior court of the county as a third-party arbiter whose decision is binding. This marks a significant change in the mechanics of the renegotiation process.
In a unanimous opinion issued last week, the Georgia Supreme Court ruled unconstitutional the 2010 amendment to the LOST Act allowing cities and counties that can’t agree on how to split the revenue, to appeal to the courts.
The court ruling could affect the ability of cities and counties to collect LOST revenue in the future.
The court’s decision came in a case involving Turner County and the cities of Ashburn, Rebecca and Sycamore.
In Fulton, 12 of its 14 cities have come to an agreement on how to distribute revenue collected from LOST. The 1 percent tax produces about $240 million to be divided each year among the county and the cities.