Valdosta Daily Times

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October 18, 2013

LOST is not lost

Agreement reached Thursday

VALDOSTA — The Valdosta City Council met in a special called meeting Thursday morning to discuss the Local Option Sales Tax (LOST) under duress to meet the 4:30 p.m. afternoon deadline to file the agreement.

As soon as the meeting was called to order, the council went into executive session.

Once the session convened back into a regular session, Mayor John Gayle announced that the council took action in the executive session.

Councilman Alvin Payton made the motion to approve the LOST's distribution at its current rate; this motion was approved unanimously.

The council comment session was next and Gayle said, “I want to take priority here because my status as mayor, and I have a few things to say.”

“I don't feel good about the decision we just made, quite honestly, but our first responsibility is to the citizens and taxpayers of Valdosta and Lowndes County,” Gayle said.

Touching on the reality of a lapsed LOST, Gayle said that the taxpayers would be the ones who suffered because property taxes would sky rocket and services would be drastically cut.

Gayle provided a history of the LOST issue from the city's perspective.

In 2010, the Georgia General Assembly recognized that some governments were threatening to allow the LOST to lapse, either as a strong-arm tactic to get what they wanted, or to impose a new tax which would benefit only certain governments at the expense of others, according to Gayle.

The Georgia General Assembly amended the LOST statute, and included an arbitration process. The statute first required a 60-day negotiation period, then it allowed 30 days for third party mediations. If no agreement was reached through those mediations, then any party could file for “baseball arbitration.”

“If no one filed for 'baseball arbitration' then the tax would expire, and if the tax expired, then property taxes would sky rocket and services would be drastically cut,” Gayle said.

It was this 2010 amendment that the Georgia Supreme Court declared unconstitutional

During the negotiations in 2010, there were four meetings scheduled for negotiations between Lowndes county and the cities within. According to Gayle, all of the five cities were present at all four meetings, prepared and willing to negotiate; whereas the county only chose to attend the first meeting. “At this meeting they presented their request to leave things the same as they were, and even threatened us if we didn't accept to raise their portion,” Gayle said. “With one party absent, no agreement was reached. Prior to and during mediation the cities reduced their request several times, the county never reduced their request, not even one penny.”

“Negotiations and mediations always require compromise,” Gayle exclaimed.

Hoping for a better deal in the near future, Gayle said that the cities are willing to renegotiate, but the city will abide by any action taken by the general assembly next year.

Concluding his council comment, Gayle said, “I am proud of our city, for being a part of the solution to prevent the lapse of this tax because of one lawsuit, and I am pleased today that we’re voting for what is in the best interest of the taxpayers. We will always be willing to meet and negotiate in good faith with the commitment to compromise and discuss these difficult issues with respect to each other and in service to our citizens.”

In an interview after the meeting, Mayor Gayle said, “The cities have grown the most, the county has not. Valdosta grew 26 percent and Hahira grew 64 percent.”

“The county never gave us anything that proved that they deserved 58 percent —  they just said we'll give it to you, and that's the last we heard from them,” Gayle said.

The LOSTtax was due to lapse on Jan. 1, 2013 but collections continued until the lawsuit by the cities could be addressed. With the lawsuit negated by the Supreme Court’s ruling, the state Attorney General’s office advised the Department of Revenue to allow the affected cities and counties to file a certificate of agreement over the disbursement of the tax proceeds by the Thursday afternoon deadline, or the tax would go away.

According to Joe Pritchard, County Manager, the city gave the county an ultimatum on Friday that they requested the county sign in order for LOST to continue. The ultimatum consisted of a formal attachment stating that the county would agree to re-arbitrate the issue at a future date and make the arbitration binding. Pritchard and Chairman Bill Slaughter said the addendum was not a legal agreement and the county did not sign it.

A joint letter issued Oct. 16 by the attorneys for both the Georgia Municipal Association and the Association of County Commissioners of Georgia stipulated that there be no addendums or attachments and the certificates should be filed “clean.”

The letter stated, “We understand that some jurisdictions may be already considering attaching conditions such as future termination dates to encourage future negotiation as suggested in earlier emails sent by ACCG. However, the Revenue Department may not enforce any such conditions... certificates should be submitted without conditions.”

After the county’s meeting on Tuesday, the commission sent the original certificate to the cities, keeping the disbursement the same as it has been, and the cities filed the certificate on Thursday.

Editor Kay Harris contributed to this article.

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