Ok, I’m going to break Local Option Sales Tax (here on referred to as LOST) down as easily as I can.
Point one and most important, “The General Assembly initially authorized the levy of a LOST in 1975 both for the purpose of providing property tax relief for residents and to assist local governments in funding all or any portion of those services provided by governing authorities…”. I get this direct quote from the PR arm of the cities ( http://www.gmanet.com/Assets/PDF/LOST_guide_2011.pdf ). So as I read it LOST is for tax relief and paying for “stuff.”
Second important point is that the current split is basically 75% for the county and 25% fot the cities.
Third important point is that LOST has to be renegotiated every 10 years (no later than 2 years after the census.) Meaning negotiations have to happen now.
Lastly, a city that qualifies for LOST must provide 3 of these 6 services: (1) Water; (2) Sewage; (3) Garbage collection; (4) Police protection; (5) Fire protection; or (6) Library. Does your city provide 3 of 6?
So the county is saying leave the percentages the way they are and the cities are saying change it to 58% for counties and 42% for cities. This is a shift in percentage of 17 points.
Now what do you think will happen if county revenue is reduced that much? Well only a couple of options exist. One, a tax increase on every citizen in the county to make up for the difference or two, a reduction of services. Which one do you think will happen? Either choice is bad for the entire county. The only other possibility is the county wins and they keep getting what they were getting (75%) and nothing changes.
What will happen if the cities win? They will all get a huge increase in city revenue. What do you think will happen? Well a particular city (hint FB) has already publically stated they are going to buy this and spend that. I bet they will need a big expensive out of town retreat to discuss it. What do you think the other cities will do? Do you think any of them will reduce city property taxes? One problem with that, what do the cities do that have zero city property taxes already? You really can’t reduce zero very much unless they mail every city resident a check. I by the way think that would be a great idea. What better way to market for people to move to your town. “If you move here we pay you!” What will happen to the cities if they loose the negotiation? Absolutely nothing will change because they will keep getting the money they already get.
Now if you live in a city you probably are thinking, boy I hope we win. Well be careful what you ask for. Because as a city resident if the county has to raise taxes guess what happens? You get a property tax increase because you live in the county too. Do you trust your city government to compensate you for the tax increase they caused? Just think about that for a few minutes before you react.
If you live in a city it is time for you to call city hall and tell them what you think. If you are friends with someone who lives in a city you better call them and wake them up.
Any nerds out there wanting specifics of the law look here http://www.lexisnexis.com/hottopics/gacode/Default.asp and type 48-8 in the search.