Walker County, cities at impasse on tax split

Walker County, cities at impasse on tax split

August 28th, 2012 by Joy Lukachick Smith in News

Walker County Commissioner Bebe Heiskell

Photo by Kelly Wegel

After a three-month deadlock on how to share Walker County's $54 million sales tax revenue, several city leaders reached an agreement Monday night.

The North Georgia cities of Rossville and Lookout Mountain agreed the county should consider a split of 30 percent of the local option sales tax revenue to share among the municipalities and leave the county with 70 percent of the funds. And LaFayette officials were coming around to the agreement.

But Sole Commissioner Bebe Heiskell brought negotiations to a halt when she said she wouldn't budge on a 75/25 split, reasoning all county taxpayers would have to pay more if she had to raise taxes to make up for the lost funds.

Deadline Wednesday

As the 90-day negotiation period on the 1 percent local option sales tax comes to an end Wednesday, city and county officials will now have to sit down with a mediator to try to come to an agreement before the decision on how to split the sales tax lands in front of a judge.

Since the negotiations began in late June, LaFayette officials have taken the lead in challenging Walker County officials on the fairness of the typical 80 to 20 percent sales tax split. Originally LaFayette officials proposed the county whittle its share to 55 percent, leaving cities with 45 percent to keep.

"We're asking for a fair share of the funds," said LaFayette Manager Frank Etheridge.

Every year, Walker County -- where about 75 percent of the population lives -- gets about $4.3 million from the generated sales tax, leaving Chickamauga, LaFayette, Rossville and Lookout Mountain, Ga., with $1.1 million to split.

County officials argue that since the majority of people live in the county, they should keep the majority of the sales tax. But city officials like Etheridge said there are more factors to consider, like where people spend their time for the majority of the day.

The argument also comes to a head over whether residents who live in the city are "double dipping" on services from the county and city. But city officials like LaFayette Councilman Ben Bradford don't see it that way because city residents pay double the amount of taxes.

Minor loss?

Officials in the small cities like Lookout Mountain Mayor Bill Glascock argued during the meeting that a 30 percent split would be a significant increase in revenue, while only a small loss to the county's overall budget.

If the county gave up 10 percent of the current sales tax split, it would lose about $800,000, which city officials argued was trivial compared with the overall budget.

But Heiskell insisted that would be a loss that would result in either lost county services in areas like the library or in raised taxes.

"I'd give you 50/50 if I could," Heiskell told city officials.