Catoosa County, cities square off over sales tax

Catoosa County, cities square off over sales tax

July 26th, 2012 by Tim Omarzu in News

Former Fort Oglethorpe City Manager Ron Goulart

Photo by Ronnie Moore


Current: Catoosa County 70 percent; Fort Oglethorpe, 20.5 percent; Ringgold, 9.5 percent

Catoosa's proposal: Catoosa, 78.62 percent; Fort Oglethorpe; 15.54 percent; Ringgold, 6.84 percent

Fort Oglethorpe's counterproposal: Catoosa, 61.27 percent; Fort Oglethorpe, 25.49 percent; Ringgold, 13.24 percent

Source: County and city officials

Like gamblers in a high-stakes poker game, Catoosa County and its two cities are facing off over how the local option sales tax -- 1 cent from every $1 purchase -- should be split during the upcoming decade.

Millions are at stake and Fort Oglethorpe and Ringgold seek a larger share. But instead of backing down, the county has upped the ante by seeking more for itself.

Currently, Catoosa County government gets 70 percent of LOST revenue, or roughly $6.65 million annually, while Fort Oglethorpe takes 20.5 percent, or about $1.9 million, and Ringgold gets 9.5 percent, or $900,000.

Fort Oglethorpe officials want more LOST money because the majority of businesses that ring up sales tax dollars are inside its borders, including Costco, Walmart, Kmart and Home Depot. The Fort Oglethorpe City Council voted in February to spend roughly $22,000 to hire a consultant to make a case for it to get a bigger share of the tax pie.

"We've grown and we've expanded and our costs have increased," Mayor Lynn Long said.

Ringgold will chip in to help pay the cost of the consultant hired by Fort Oglethorpe.

County commissioners voted in April to spend $18,000 on their own LOST consultant.

The two sides met for the first time on July 13 to discuss the tax breakdown.

According to a July 18 letter from Catoosa County Attorney C. Chad Young, the county seeks to keep 78.62 percent of LOST proceeds, with Fort Oglethorpe getting 15.54 percent and Ringgold getting 6.84 percent. At 2011 rates, that would mean an extra $665,000 annually for the county, or $6.65 million over a decade. It's money the cities would give up.

"Our consultant's report came out with the number," Young said.

The consultant based the split on eight criteria, including such things as population and the expense of providing jail, fire safety and animal control services.

"I don't think the [county's] proposal we've received is anything ... we could live with. There's no way," Fort Oglethorpe City Manager Ron Goulart said.

Fort Oglethorpe hasn't officially counter-offered, but according to preliminary figures made available to the Ringgold City Council, the two cities are likely to seek to see the county's share cut to 61 percent while Fort Oglethorpe's cut grows to 26 percent and Ringgold gets 13 percent.

The additional 9 percent for the two cities would add up to almost $9 million over a decade.

"We're starting off pretty far apart," noted Ringgold City Councilman Nick Millwood.

Long acknowledged that, whatever the final decision, "the reality is, somebody's going to get less money."

If the sides can't negotiate a split, a mediator would attempt to reach an agreement amenable to all the parties. Goulart thinks mediation could work.

"It used to be, the city and the county, they couldn't be in the same room," he said. "[Now], I think we have a pretty good relationship.

"If the mediation process fails, then we would go to Superior Court," he said, where a judge from outside the region would preside.

The once-a-decade LOST apportionment process features what's been described as baseball-type arbitration. The judge would pick one proposal or the other -- not a compromise of the two -- a method meant to keep either side from overreaching.

"You've got to be realistic on what you're asking for," Goulart said.