Fort Oglethorpe and Ringgold will receive an incrementally higher percentage of Catoosa County’s local option sales tax over the next 10 years, according to an agreement reached after a long day of negotiations with the county Tuesday.
Cities advocated a higher sales tax percentage because city businesses generate a majority of tax revenue, while county officials said the county is responsible for funding the vast majority of services. The distribution of sales tax between cities and counties is required by law to be renegotiated every 10 years, and the deadline for the state to submit a new distribution is Friday.
In the first year of the new agreement, 2023, Catoosa County will receive 70% of sales tax, Fort Oglethorpe will receive 20.99% and Ringgold will receive 9.01%. This split of the distribution will gradually shift to improve the payout to the cities and in year 10 the county will get 62%, Fort Oglethorpe 26.59% and Ringgold 11.41%.
(READ MORE: Ringgold, Ga., Wins $1 Million in Local Options Sales Tax Negotiations)
“When we went into the Local Options Sales Tax (LOST) negotiations, we wanted a little credit for growing the pie, and we’re going to keep growing the pie,” Ringgold Mayor Nick Millwood said in a phone interview. “So they (Catoosa County officials) were gracious and had budgetary concerns, so we did it as a stair step approach.”
Millwood said the local option sales tax accounted for about a quarter of Ringgold’s budget last year, raking in about $1.4 million. He said Ringgold and Fort Oglethorpe were looking for more taxes to offset recent growth.
Catoosa County has a 7% sales tax. Of this, 4% goes to the state, and 1 percentage point each goes to the Local Option Sales Tax, Local Educational Option Sales Tax, and Local Special Purpose Option Sales Tax.
During budget hearings this fall, Catoosa County Chief Financial Officer Rachel Clark said that 26% of the county’s proposed fiscal 2023 budget would come from the local option sales tax. Property taxes accounted for 52% of the county’s proposed budget. Fiscal year 2023 started on October 1st.
The hearings took place at the Colonnade Event Center and Performing Arts Theater in Ringgold.
The potential for the tax negotiations to fail is high, and Millwood said he thinks legislation is needed to improve the distribution process.
Millwood said he doesn’t know exactly what the process should be, but it could go back to a process where each party makes a firm offer and an arbitrator chooses one, rather than trying to negotiate and meeting in the middle.
Although the negotiation process took 13 hours, Millwood said that all parties involved were committed to reaching an agreement.
Catoosa County Commissioner Chuck Harris said the negotiation process was cumbersome and ambiguous. However, all parties involved played by the rules, he said in a phone interview, and they ended up with about the same split as when negotiations began.
Harris said the county pays for 79% of services across the county, city advisors found, including services that go to cities.
The cities’ argument was that the cities own a majority of the county’s businesses, but Harris said the county funds the roads, emergency services, courts and the prison when emergencies happen at those businesses.
“There’s a lot of cost to having business that the county incurs,” Harris said. “We didn’t negotiate from the side, ‘Hey, we want fancier street lights or we want street pictures.’ We’re trying to pay for fire and emergency services and courts and prisons and animal control centers, senior centers, senior transportation…all the things that the county pays for itself.Libraries,all of that.
Vanita Hullander, another Catoosa County Commissioner, said in a phone interview that everyone involved was professional when a resolution was found.
“It’s good if the whole government can come together and come up with a sensible solution that benefits everyone in the county without putting a financial burden on anyone,” Hullander said in a phone interview.
The negotiations were conducted in an executive session, a session that is not open to the public. Georgia State Senator-elect Mitchel Horner was among several concerned citizens and attending media representatives who were asked to leave the meeting.
Horner spoke to elected officials during breaks and stayed until about 8:30 p.m. when negotiations ended. He congratulated those involved in a telephone interview on Wednesday morning.
“The agreement was fair and reasonable and a good compromise for each position and party,” he said, reading his prepared statement. “I commend all parties for their willingness to compromise for the good of the people.”
(READ MORE: Catoosa County Commission ready to approve budget and tax increase)
Earl Gray, Mayor of Fort Oglethorpe, could not be reached for comment.
Joanna Hildreth, a county resident, said her Dec. 12 public record request, asking the county for correspondence and consultant reports on the sales tax negotiations, was not honored.
There is a lot of money at stake in these negotiations and Hildreth said she wanted to know how the citizens would be represented by the county. She said at the meeting it was frustrating that the county had not complied with her request and that officials could be fined for the failure.
In February, a Georgia Court of Appeals ruled that Georgia citizens — as well as the Attorney General — can seek civil penalties from officials in open-record cases.
(READ MORE: Catoosa resident files lawsuit after being kicked out of commission meeting)
Outside of the meeting, George Battersby was annoyed that local residents were unable to attend the negotiations.
He also said the money the county and cities spend on negotiators and attorneys could have been put to much better use — “all because of their inability to sit down with a cup of coffee and negotiate on their own,” the Ringgold resident said .
Contact Andrew Wilkins at awilkins@timesfreepress.com or 423-757-6659. Follow him on Twitter @tweetatwilkins.
