The mayor of Tifton, Julie Smith, has urged Georgia state senators to address a sales tax distribution system that currently disadvantages cities in favor of counties. The current system requires cities and counties to engage in an arbitration process to allocate local sales tax revenues when an agreement cannot be reached. This process tends to favor counties over cities.
One issue lies in the alternative called the homestead option sales tax (HOST), which counties can opt for to reduce property taxes on owner-occupied housing and infrastructure. Unlike local option sales tax revenue, HOST revenue is not shared with cities, giving counties leverage during negotiations.
Smith shared an example where Tifton and Tift County’s negotiations ended with the county threatening to adopt HOST if the city’s demands were not met. The dispute escalated, leading to an unsatisfactory compromise. This lack of transparency and disputes over revenue distribution has affected other cities and counties in Georgia.
Smith suggested linking sales tax revenue distribution negotiations with service delivery agreements between cities and counties, which require them to address service duplication and double taxation every 10 years. Smith and other officials are calling for reforms in the system to ensure fairness and transparency and are seeking assistance from state lawmakers. The study committee will hold further meetings before potentially making recommendations for Senate consideration next year.