Mayors: Standoff with Chatham County over LOST sales tax a threat to Savannah area taxpayers

Chatham County government leaders along with those of the county's eight municipalities are renegotiating a sales tax agreement that provides operating funds for local governments, offsetting expenses otherwise covered by property taxes. The Local Option Sales Tax, also known as LOST, is a 1% levy on most goods and services purchased in Chatham.

LOST funds are divided between Chatham and the municipalities, and leaders negotiate the the size of those two shares every 10 years when the agreement is up for renewal. The agreement expires Jan. 1 and projections are LOST will generate approximately $1 billion over the next decade.

Lost when it comes to LOST?: What you need to know about the Local Option Sales Tax

An impasse between the two sides broke Friday, when the Chatham Commission approved a proposal that closed the gap between previous plans put forth by the two sides. The city's latest proposal is for the county .share to range between 23% - the percentage under the current agreement - and 31%. The county has accepted a 31% share.

Leaders will meet Dec. 7 for a mediation session to consider the 31%-69% split.

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

'We are not disagreeable.': What to know about Chatham chairman's position on sales tax talks.

Several municipal mayors submitted letters to the editor last week regarding the LOST standoff. The letters reference the county's earlier proposal, which called for a 31% share with an annual 2% escalation and a 49% cap. The county's latest proposal caps Chatham's share at 31%.

Here's how the mayors' letters read:

Pooler mayor: Stop Chatham chairman's 'greedy plan' for LOST

The City of Pooler would be forced to increase our property tax rate by 32.5% should the Chatham Commission insist on a radial shift in how local sales taxes are divided in the county. That would mean the owner of a home valued at $300,000 would pay an additional $179  in taxes annually.

Time is running out. State law requires counties to renegotiation how much each jurisdiction receives in Local Option Sales Tax (LOST) revenue every 10 years. This would be catastrophic for Pooler, which relies on LOST - our second largest revenue source - to fund basic services.

Pooler and the county's seven other municipalities have urged Chatham County leaders to keep the LOST formula the same as the current rate. It's a strategy that has worked: during four decades of negotiations, the change in LOST distribution has never moved more than a few percentage points, helping keep taxes low for everyone.

Chatham Chairman Chester Ellis is now insisting the county received more than double its current share of LOST by the end of this decades. The additional millions annually that the county would receive would come at the expense of cities, where 80% of LOST is generated. This shift is particularly unfair for Pooler, which has experienced six times the unincorporated county's growth rate since 2010.

Please urge our county commissioners to stop this greedy plan that will increase taxes for the people of Pooler.

Rebecca Benton, mayor, Pooler

Vernonburg leader: Keep LOST formula within historic ranges

Chatham County and its eight municipalities are negotiating a new distribution formula for the 1% Local Option Sales Tax (LOST), as required every 10 years by Georgia law.

Inexplicably, the Chatham Commission is insisting on a radical shift in that formula for the first time in 40 years, claiming financial hardships, despite having rolled back millage earlier this year.

In fact, Chatham Chairman Chester Ellis was then quoted, “I feel that (with) the millage rollback, we can sustain and still be exactly where we are….I just knew because of the way things were going and the prosperity of Chatham County….. we could roll it back two mills.”

Under the chairman’s latest plan, the county’s LOST share would increase from 23% to 49% of LOST sales taxes collected. This would increase county revenue by more than $26 million per year at the expense of Vernonburg and Chatham’s seven other municipalities. How does this correlate to the rollback?

Vernonburg, along with the other municipalities, would be forced to increase taxes to offset the revenue reduction we would experience under Chatham County’s plan. Why such an aggressive distribution formula at the expense of 70% of the county’s residents in the face of the rollback?

All the municipalities have urged Chatham County leaders to keep the LOST formula within manageable historical ranges. It’s a strategy that has worked: during four decades of negotiations, the change in LOST distribution has never moved more than a few percentage points, helping lower taxes for everyone, hence the county’s rollback/

Please urge your county commissioners to strongly reconsider Chairman Ellis’ current plan. Otherwise, LOST funding is at risk and everyone will pay the price.

Jimmy Hungerpiller, intendant, Vernonburg

Bloomingdale mayor: Let's come together on LOST

Under the current Chatham County proposal for the LOST distribution, the City of Bloomingdale would lose half of our annual Local Option Sales Tax revenue. The LOST is by far Bloomingdale’s largest single revenue source accounting for 22% of our General Fund that pays for services such as Police, Public Works, Recreation among others.

This year, Chatham County is insisting on doubling its share of LOST funds from 23% of a total distribution to 50%. There is no justification in State Law for a shift of this magnitude. In fact, even the Association of County Commissions of Georgia (ACCG) states in their LOST information that a maximum increase of 3 to 4% for counties is standard if justified.

I urge all citizens of Chatham County to contact your County Commissioner to strongly oppose the County’s plan. In these volatile inflationary times, the citizens of Chatham County cannot and should not have to withstand a property tax increase.

All the elected officials in Chatham County should come together on a LOST agreement that serves the greater good for all Chatham County citizens.

Dennis G. Baxter, mayor, Bloomingdale 

Thunderbolt mayor: LOST expiration would hit smaller communities hardest

The current Chatham County LOST proposal would radically shift how local sales tax dollars are divided, and would create an unnecessary hardship to all county residents, whether they live in the unincorporated county or in one of the municipalities — the smaller communities will be hardest hit.

The Town of Thunderbolt, for example, would require an 87% increase in our property tax rate to offset the reduction in sales tax revenue. The owner of a $300,000 home in Thunderbolt would see a $640 increase in annual property taxes.

The county has insisted on this plan throughout the Local Option Sales Tax (LOST) distribution negotiations, which state law requires every 10 years. Thunderbolt and the county’s seven other municipalities, by contrast, have proposed a continuing and sensible plan that maintains the existing LOST distribution formula. This is in keeping with previous negotiations, which have allowed all municipalities’ residents to keep property taxes low for the past forty years.

With LOST set to expire Dec. 31, the county proposal would negatively impact all unincorporated residents who own businesses, have business dealings with, or enjoy any of the vast amenities offered within the municipalities. A $26 million annual swing in sales taxes would have a destabilizing effect for all municipalities, which would then overburden 70% of Chatham County residents directly.

Thunderbolt encourages an expedited resolution to the Local Option Sales Tax discussions to ensure another decade of fiscal stability. At this moment our best plan of action is to be a united front to help the entirety of the County. The current 77% allocated to the municipalities is long-established because it is the lion’s share of draw and generation of the LOST revenue; therefore, it will cost the municipalities more money to maintain infrastructure, event venues, etc., without the fruits of their investment.

Dana Williams, mayor, Thunderbolt

This article originally appeared on Savannah Morning News: Mayor letters criticize Chatham Commission over Local Option Sales Tax