Savannah, Chatham agree to tax deal; Savannah revenue will drop by $6.4 million under proposal
NOTE: This article was originally published March 7, 2013.
Savannah and Chatham County officials agreed on Wednesday to a tentative deal that establishes each government's share of an estimated $630 million in local option sales tax revenue for the next 10 years.
The agreement would reduce Savannah's share of tax revenue from about 67 percent to about 57 percent. The reduction amounts to a loss of about $6.4 million a year, said Dick Evans, acting assistant city manager.
The county, which had sought to increase its portion from about 18 percent to 33 percent, will instead receive about 23 percent of the revenue. Chatham's tax revenue would increase by about $3.1 million, but only achieve a net gain of about $1.8 million due to another component of the deal, said Linda Cramer, assistant county manager.
The county will lose about $1.3 million a year by agreeing to accept all costs for the incarceration of municipal inmates at the county jail. Currently, the cities pay Chatham a daily $35 reimbursement rate to house inmates.
The remaining portion of the tax revenue would be split among the seven smaller municipalities. Pooler and Port Wentworth will receive increased amounts, while Garden City's share will decrease, as a result of population shifts.
The Savannah City Council is expected to consider the agreement today, while the county commission may discuss it during its meeting Friday. Commission Chairman Al Scott said he would finalize the agenda this morning.
The deal was reached after senior Superior Court Judge Robert Adamson pushed the two governments to compromise on Tuesday during the second day of a hearing held to resolve the dispute. Adamson would have had to select either the city's or county's proposal as presented if an agreement had not been reached.
Scott said Adamson thought the city's proposal was too low and the county's was too high. It was also clear that Adamson was reluctant to make the large adjustment the county had been seeking, Scott said, although he was sympathetic to Chatham's position.
"I think it's the best possible offer we could get at this point," he said.
County officials had argued the additional revenue was needed to help cover an estimated $10 million increase in jail operation costs next fiscal year, in addition to about $114 million in countywide services Chatham provides.
City officials said the county's proposal to reduce Savannah's share to about 48 percent would have cut revenue by about $12 million a year, requiring a property tax increase of about 26 percent to make up the difference.
Savannah Mayor Edna Jackson said she did not know whether city taxes would have to be increased as a result of the $6.4 million reduction in revenue under Wednesday's agreement. City staff will have to review the impact and the decision will have to go before the full council, Jackson said.
After beginning negotiations last summer, Jackson said, she was glad the two governments were able to come to terms and "move forward."
BY THE NUMBERS
Savannah, Chatham County LOST agreement
Chatham County: 17.8% to 23%
Savannah: 67.2% to 57%
Bloomingdale: 1.36% to 1.36%
Garden City: 5.77% to 4.3%
Pooler: 3.19% to 8.84%
Port Wentworth: 1.67% to 2.47%
Thunderbolt: 1.2% to 1.23%
Tybee Island: 1.73% to 1.73%
Vernonburg: .07% to .07%
This article originally appeared on Savannah Morning News: Savannah, Chatham agree to tax deal; Savannah revenue will drop
