Cities are happy with LOST revenue distribution, Coweta is not

The Coweta County local option sales tax renegotiation process began Wednesday, in a meeting that at times seemed contentious as the cities and Coweta County disagreed on how whose local option sales tax revenues should be distributed.

At the meeting, representatives from most towns in Coweta County – Newnan, Senoia, Grantville, Sharpsburg, Palmetto, Turin and Chattahoochee Hills, were present and most indicated that they were satisfied with the current distribution of LOST funds.

The distribution of LOST funds, however, could change in the coming years if the Town of Chattahoochee Hills, a town shared by Coweta and Fulton counties, is gradually integrated into the LOST system and receives at least a portion of the proceeds from the sales tax.

Officially, no final action has been taken by the county and its cities regarding LOST revenue sharing, but a committee has been formed containing representatives from most of the cities as well as the county to determine next steps.

Under state law, the county and its cities must enter into a LOST revenue-sharing agreement within 60 days of the start of negotiations.

Mayor Dub Pearman of Senoia said with more revenue, everyone will continue to receive more funds from sales taxes.

“Even keeping the percentages, the pie gets bigger,” Pearman said. “I don’t have a magic 8 ball, but the base forecast is for it to keep growing, so as long as the pie gets bigger, getting the same percentage won’t hurt us.”

Blue Cole, mayor of Sharpsburg at the east end of Coweta, suggested that if the towns were happy there was no point in deliberating on “one or two percentage points”.

“If we keep it close to where it is, including phasing in Chattahoochee Hills, there’s no reason to sit here when we could be sitting around the dinner table with our wives and our kids,” Cole said.

“If it ain’t broke, we don’t need to fix it,” said Al Grieshaber, city manager of Grantville, on the south end of the county.

But Coweta County officials disagreed. County Administrator Michael Fouts said that in the last LOST revenue distribution negotiation, the county lost some of the revenue, which went to other towns.

According to documents provided to meeting attendees by the Coweta County government, the county received up to 72.74% of LOST revenue as a result of negotiations in 2002. This number has dropped over the years as towns who have become eligible for LOST income due to changes in services or annexation. .

To receive a portion of LOST revenue, a city must meet the definition of a “qualifying municipality”, which means incorporated municipalities that impose a tax other than a LOST sales tax and provide at least three services, include water, sewer, garbage collection, police protection, fire protection or a library.

There are eight criteria for the distribution of sales tax proceeds, including the service delivery responsibilities of each “political subdivision” to the population served by that jurisdiction and served during normal business hours, as well as to the resident population; the current responsibility for service delivery of each political subdivision; the effect of a change in the distribution of sales tax on the ability of each political subdivision to repay its short-term and long-term debt; the point of sale and use that generates the tax to be apportioned; existence of intergovernmental agreements involving political subdivisions; the use of any political subdivision of taxpayers’ property taxes and other income to subsidize the cost of services provided to other taxpayers; and any co-ordinated county and municipal service delivery and funding plans.