LOST and found? Chatham Commission approves sales tax sharing agreement with cities

The Chatham Commission on Friday approved a new proposal for dividing Local Option Sales Tax, or LOST, revenues with the county's municipalities, clearing the way for renewal of the 10-year agreement.

Chatham will accept a 31% county-69% cities split of the funds as suggested by city leaders earlier this week. In a letter dated Nov. 29, municipal officials listed the 69% rate as the lowest they would consider in negotiations. Chatham Chairman Chester Ellis clarified after that the share would not escalate as the commission previously proposed and remain at a 31%-69% split for the next 10 years.

The latest proposal comes just three days after the mayors sent a letter declining a county plan that established Chatham's share at 31% but included an annual 2% escalation. Under that scenario, the county's portion would climb to 49% over the 10-year length of the agreement.

New LOST proposal: Mayors propose share range for cities, county in negotiations

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Friday's approval was the biggest compromise shown yet by the county. Throughout the process, Ellis and the commissioners have taken a hard negotiation stance on their LOST share. Following the meeting, Ellis said the county's previous proposals were a negotiation tactic — "all part of the plan."

"It was a ploy and a plot, ok? You start where you wanted to go, then we moved down to what we can live with," Ellis said.

LOST is a 1% levy on most goods and services purchased in Chatham and the distribution must be renegotiated and renewed every 10 years. Projections are LOST will generate approximately $1 billion over the next decade.

What happens next in the LOST saga?

The commission's approval on Friday does not guarantee an extension of LOST. Municipal leaders must likewise agree to the new funding formula distribution and vote for approval through their various legislative bodies, such as Savannah City Council.

Savannah City Manager Jay Melder arrived at the county commission chamber before Friday's meeting ended. Afterwards, he said he's still expecting the county to show up for the LOST mediation session scheduled for Wednesday, Dec. 7.

The county's latest proposal vows to accept the most the cities said they would concede in the letter sent to the County Commission earlier this week, signed by the mayors of all eight Chatham County municipalities.

And Melder was clear: it's not a done deal yet.

"This doesn't represent an agreement. We are honest and transparent about the bracket that we think is fair and equitable," Melder said. "Obviously, the county wants the highest end of that. But the issue here is how we get there, and what we're trying to avoid is this deal raising taxes on 70% of the population. It's a good sign that the county's down to 31%, versus 50% or 49% — that's a good sign. We're getting into the space and we're looking forward to mediation next week."

"The offer was that the county agree to join us in mediation on Wednesday and agree to terms that we will be negotiating between the current allocation of 23% [county] / 77% [municipalities] as the floor and the ceiling as 31% [county] / 69% [municipalities]," Melder said.

'Fair and equitable'

A constant among the county's calls for an increased share of the LOST revenue has been the services they provide for all municipalities in the county, specifically the court system and the jail.

"The municipalities must understand this: the cost of providing those essential services goes up. They're going up just like gas is," Ellis said.

Asked whether he considered the split approved by the commission to be fair, Ellis said he considers it "fair and very equitable."

Ellis said he met with Savannah Mayor Van Johnson on Wednesday and said the two were "on the same page." Ellis plans to take the proposal to the municipalities next week at the mediation session.

"Our ceiling was 50/50, and we came down off the ceiling. All we're trying to do is meet at the halfway point so that no citizen — and let me repeat that, no citizen — is adversely affected," Ellis said.

This article originally appeared on Savannah Morning News: Chatham Commission makes new proposal on local option sales tax