Gretchen reports LOST was the topic at today’s special called meeting of the Lowndes County Commission. And yes, they went into executive session. Rumor has it that it’s not 120 days to come to an agreement, rather this week is the deadline. That’s what seems to be happening over in Hall County.

Sarah Mueller wrote for Gainesville Times today, Hall commissioners to consider new local option sales tax certificate,

Hall County Administrator Randy Knighton said the special called commission meeting today at 4 p.m. at the Hall County Government Center in Gainesville was in response to a suggestion from the Association County Commissioners of Georgia. ACCG has talked with the Department of Revenue and the Georgia Attorney General’s Office.

“(ACCG) has advised us that each county who has been engaged in the LOST arbitration proceedings submit a new LOST certificate to the Revenue Department this week,” Knighton said.

Knighton declined Monday to say what type of distribution commissioners are likely to approve, but he did say officials have not discussed the “best and final offer” that each side submitted to retired Superior Court Judge Frank Mills earlier this year.

Gainesville Mayor Pro Tem Bob Hamrick, City Manager Kip Padgett and Assistant City Manager Angela Sheppard declined to return calls Monday seeking comment. Lula City Manager Dennis Bergin said he hadn’t heard of any decision reached between the cities and Hall County.

And a bit more from ACCG:

ACCG advocated its position on the Supreme Court ruling to Attorney General Sam Olens last week, which is that counties continue to file notice and collect money under the old process.

“The counties and cities that relied on the law at the time filed notice saying they wanted to continue the old formula for splitting the money until such time as they reached a final resolution under this resolution process,” said Clint Mueller, legislative director of ACCG.

ACCG has a not terribly helpful undated LOST issues page:

Counties and cities throughout Georgia have been renegotiating Local Option Sales Tax (LOST) distribution certificates since July 2012. While most counties were able to conclude negotiations and file their revised certificates prior to December 31, 2012, more than 30 counties had to file for arbitration in an effort to arrive at a final LOST distribution certificate with their cities.

The LOST arbitration proceeding is known as “baseball” arbitration and takes place before a superior court judge.  The county and the cities are required to submit to the judge their final offers as to how the LOST proceeds should be distributed based on criteria specified in the LOST law. The judge then chooses either the county’s final offer or cities’ final offer and that becomes the basis for the new LOST certificate.

In spring 2013, the constitutionality of that proceeding was challenged.  On October 7, 2013, the Georgia Supreme Court issued its opinion in the case and ruled the judicial arbitration proceeding was “…a clear violation of the separation of powers doctrine.” 

Note that the Court did not invalidate the LOST or how it is used or how it terminates. However, the Court refused to provide any remedy that might provide the counties and cities involved in arbitration additional time to renegotiate a new tax certificate. So, the decision clearly invalidates LOST distribution certificates that were imposed by way of the baseball arbitration proceeding.  Presumably, LOST will now terminate for any county that has not yet filed a valid LOST certificate with the Department of Revenue.

Beyond that a number of questions remain, including:

  – When do collections terminate relative to the affected counties?
  – Which counties are affected?
      – Only those that still have not filed a LOST certificate to date? 
      – Those that filed a certificate under the arbitration proceeding after December 31, 2012?
      – Those that filed a certificate under the arbitration proceeding before December 31, 2012?
      – Those that arrived at a negotiated settlement with their cities after filing for arbitration?

The Department of Revenue will have to provide guidance the above questions. ACCG will continue to monitor this situation and provide more information as it becomes available.

Attached you will find a copy of the Supreme Court Decision as well as the counties that may be impacted by this decision.

-jsq

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