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County, cities settle lawsuit on tax funds

By Jason A. Smith

jsmith@henryherald.com

McDONOUGH — Henry County government reached a settlement with its four municipalities over how money from a 1-cent Local Option Sales Tax will be allocated. The county’s share will increase to 66 percent two years from now, leaving McDonough, Stockbridge, Hampton and Locust Grove to split the remaining 34 percent.

Until then, LOST funds — imposed to reduce property taxes — will continue to be split 65-35.

“The idea was that so much of our sales come from up and down I-75, so it would ease the property tax burden,” said attorney A.J. “Buddy” Welch, who represented the cities.

The county and cities agreed on the percentages Dec. 20 and put it into effect this week. Once it begins in 2015, the 66-34 split will remain in force until 2022.

The largest municipal share of the tax funds will remain in Stockbridge, which had a population of 25,636 in the 2010 census. LOST funds there will climb steadily from 11.03 percent in 2013 to 11.36 percent by 2022.

Stockbridge Mayor Mark Alarcon said the LOST negotiations resulted in a “tremendous windfall” for residents of his city, ensuring that no property taxes will be imposed in Stockbridge for the next 10 years.

“If that’s not something to get excited about, I don’t know what is,” said Alarcon.

Hampton is the only city whose percentage of LOST funds went down as a result of its slower-growing population, which stood at 6,987 for the most recent census.

“Hampton has a little over 3 percent of the total population of Henry County,” said City Manager Andy Pippin. “Hampton hasn’t grown as much as the other cities or the county in the last 10 years. So while I’m disappointed that we will be receiving a lesser percentage than we have in the past, I believe that we are still going to receive a very fair share of the money.” 

Pippin said the total pool of sales tax dollars is expected to increase over the next 10 years and could negate Hampton’s decrease in LOST percentages.

“We have also structured the allotment in a way that we gradually step down to our final percentage over a number of years,” he said. “I believe the four cities of Henry County handled this negotiation in a very fair and amicable way.” 

Locust Grove has the smallest population of any city in Henry, at 5,402. City Manager Tim Young said he is pleased with the outcome of the LOST negotiations.

“We anticipate that sales throughout the entire county will increase over the next 10 years as our population and our retail base increases,” he said.

Young said while Locust Grove will continue to receive less in LOST funds over the next decade, the city’s LOST fund percentage will increase during that time.

“It begins to equal out with Hampton toward the end of that 10-year period,” he said.

McDonough, which had a 2010 census population of 22,084, came out of the LOST negotiations set to receive 9.61 percent of the tax funds in 2013. That figure is scheduled to climb to 10 percent from 2016 to 2022.

The numbers were arrived at through what County Manager Fred Auletta called a “long and arduous process” for all parties involved.

“We are glad that the process is over so that we can get back to the business of the county,” said Auletta. “We look forward to continuing to work with the cities toward creating greater opportunities and a better quality of life for our citizens.”

After the county and its cities were unable to reach an agreement through mediation, negotiations were taken before Monroe County Superior Court Judge Thomas Wilson. As part of the negotiation process, Welch said, Henry and the cities each submitted their best offer regarding the tax percentages for the judge’s review.

The county’s proposal was to reduce the cities’ collective allocation of the tax money to 30.5 percent. Welch said the judge determined Henry County was asking for too much money.

“What the county was asking for was something the cities could not accept,” said Welch. “Our best and final offer was to leave it alone, not to change it. The county’s best and final offer was to reduce it from 35 percent to 30.5 percent over a 10-year period. The judge recommended to leave it as is for two years, then reduce to 34 percent. The cities and county accepted that.”