The Whitfield County Commission has submitted a counter offer to the city of Dalton, Georgia, over the shared services agreement, but the panel won’t budge on giving the city a bigger share of local option sales tax revenue.
In a letter sent Monday, Whitfield County’s attorney Robert Smalley said the commissioners do not see “any realistic pathway to compromising” the services agreement “by shifting [local option sales tax] points to Dalton.”
In fact, the current local option sales tax (LOST) agreement is scheduled to be renegotiated in 2022, and the county is planning to ask for a larger share than the 61.5% it gets today, Smalley said.
The LOST is a 1% sales tax, usually a special district tax, voted on by citizens and imposed on purchases and sales in a county. A county then agrees on how much of the 1% it will split with the municipalities in the county.
Whitfield County officials believe that when the city of Dalton received 22% more in the 2012 LOST agreement than it had in the previous one, that was more than enough of a split.
“Frankly, the county is still absorbing the enormous shift that occurred during the 2012 LOST negotiations,” Smalley wrote, adding that because of population increases and other factors, the county expects to ask for more of that percentage back in 2022.
After eight hours of mediation on Oct. 17, the city of Dalton, Georgia, and Whitfield County hit a wall and couldn’t find common ground on an agreement over government services before the Oct. 31 deadline.
Without an agreed-upon strategy, Whitfield County could lose its qualified local government status – a state designation that ensures that municipalities don’t duplicate services – and potentially miss out on millions in state and federal grant funds.
Days later, the city sent an offer to the county that had seven specific proposals. Part of the city’s offer involved eliminating the need to negotiate the LOST in 2022.
In Georgia counties, local option sales tax revenue is renegotiated every 10 years under a state mandate. Whitfield County and Dalton are approaching year eight of the current deal.
County officials believe the LOST agreement should be negotiated every 10 years. The city believes it has a case to negotiate that tax distribution now because city residents are paying for services that they don’t use.
One of the bigger proposals from the city was for it to stop paying $2.2 million for three services that city residents don’t use and instead have those costs covered by the county: the county’s engineering department, the maintenance and operation of the county’s Parks and Rec department, as well as $250,000 in costs related to administrative, human resources and finance services.
Smalley wrote that the county is open to negotiating the Parks and Rec share by managing and operating all youth and adult sports programs countywide and paying for those operations from its general fund. That could save the city of Dalton more than $1.5 million a year.
The city and county each would still own and manage their own parks and pay for upkeep on them.
The city would continue to operate the Senior Center as a jointly funded project with the county’s share still coming from a special tax district, Smalley wrote.
The city is trying to reclaim some tax dollars by saying that it shouldn’t have to pay for the construction of county roads because city residents don’t directly benefit from those roads.
The county strongly disagrees with that point.
“The Board of Commissioners looks at our county as an organic community,” Smalley wrote. “There are over 129 discreet connection points between City of Dalton streets and county roads. There are many city residents who must drive on county roads to go to work each day and then go home each night.”
Dalton’s proposal last week would shift about $1.7 million dollars from the county to the city, Smalley estimated.
Andrew Welch, the lawyer representing the city of Dalton, has tried to make the same case on the county and city road systems for other municipalities.
“The only two Superior Courts ever to address the matter in Georgia have found that the county road system benefits all citizens and is appropriately funded by the county general fund,” Smalley said.
Smalley also said that no county in Georgia has agreed to fund its road system with a special tax district in the way the city of Dalton is asking.
Dalton City Administrator Jason Parker said Wednesday that because the city does not receive any funding from county taxpayers for its own road construction, city taxpayers shouldn’t be on the hook for county roads.
Whitfield County commissioners also proposed that either the city or the county take over the operation of the Dalton Convention Center in 2020, but that no money should be exchanged no matter who takes it over.
Right now the city and county share ownership of the facility.
The city also has proposed taking over and providing its own building, permitting and stormwater inspections. The county asked the city to hold off on that change until the two can meet and discuss the issue more thoroughly and try to come up with a compromise.
Smalley ended the letter by requesting an extension through the end of February so the two sides can take their time settling the difference.
Parker said the Dalton City Council and mayor Dennis Mock are actively considering approving an extension to February after receiving the county’s letter but would prefer a shorter extension.
Parker added that everything the city offered last week is still on the table.
“It’s still all in play,” he said. “We want to take our time and consider everything they sent us, as well.”
Contact Patrick Filbin at pfilbin@timesfreepress.com or 423-757-6476.