Peach County in limbo over penny sales tax | Politics | Macon.com

FORT VALLEY — Peach County officials, and those in at least 17 other counties, are struggling to understand the ramifications of a Georgia Supreme Court ruling that may have left them without enough money to fund their budgets.

Peach County — and its cities within — may lose its 1 cent local option sales tax, which is used to roll back the millage rate, after the court ruled a new process the legislature enacted is unconstitutional. For now, there are more questions than answers about whether the tax will stop immediately, when it could be reimposed and how the governments would function without it.

“Guidance should be available by the end of the week,” said Nick Genesi, a spokesman for the Georgia Department of Revenue, which is working with the state attorney general on an official interpretation of the ruling.

All but three of Georgia’s 159 counties have such a tax, called a LOST, and most were approved by voters years ago. The funds from that sales tax go to cities and counties’ general fund, so taxpayers pay a lower millage rate than if the tax did not exist.

Peach County would need a millage rate of 17.041 mills to balance its general fund. But the LOST, enacted in 1976, allowed commissioners to pass a 13.555 millage rate for fiscal 2014, which began Oct. 1.

Every 10 years, state law requires a county and cities within to renegotiate how the LOST revenue would be split among the governments. The legislature added a final step that went into effect last year that allowed the governments to ask a judge to make the decision in arbitration if they could not agree by year-end.

The Georgia Supreme Court ruled Monday that arbitration is unconstitutional because it’s a judicial process making a decision on taxes — a legislative function. In short, arbitration violates the constitution’s separation of powers.

via Peach County in limbo over penny sales tax | Politics | Macon.com.