On October 7, 2013, the Georgia Supreme Court issued an opinion that part of the Local Option Sales Tax (LOST) law is unconstitutional. In the case of Turner County vs. the City of Ashburn, the justices unanimously stated that the “baseball arbitration” portion of the negotiating process is unconstitutional, as it, in their opinion, violates the separation of powers clause in the Georgia Constitution.
In the process for renegotiating the LOST between counties and cities, if an agreement cannot be reached, one or the other of the negotiating parties can request that a Superior Court Judge from another jurisdiction make a final decision on the percentages granted to the county and cities. In the process, this is called “baseball arbitration,” and it is this portion of the process that the Supreme Court issued an opinion against.
Upson County and the City of Thomaston were able to negotiate a settlement on the LOST percentages, and the issue did not have to go to a judge for final decision. Thomaston Mayor Hays Arnold issued the following statement Monday morning in which he states the city attorneys do not feel this Supreme Court decision will affect the agreement signed by the county and city.
“As you may know, a Georgia law requires cities and counties to reach an agreement over how to divide proceeds from the local option sales tax, or LOST. Many times, the cities and counties could not reach agreement on this issue, and the Georgia legislature passed an amendment to the law that allowed cities and counties to go to a Superior Court judge to resolve their differences.
“In the case of Thomaston and Upson County, after months of negotiations, the parties reached an agreement over a month ago between themselves, so the judge was never asked to rule on the question of how the LOST proceeds should be divided up. That agreement was entered as a part of a court order addressing other issues between the City and County on September 4, and it is a final order that cannot be appealed.
“This past Monday, the Georgia Supreme Court issued an opinion which affects cities and counties engaged in litigation over LOST proceeds. The Supreme Court, in a limited opinion, struck the 2010 amendment to the LOST statute authorizing judicial arbitration as violating the separation of powers clause of the Georgia Constitution. I have discussed this case with our attorneys, and, while there is some uncertainty as to what the decision ultimately means for cities and counties who cannot agree, our attorneys are confident that the Agreement entered between Thomaston and Upson County is not affected by this decision.
“We are fortunate that the leaders of this community resolved the issue of how to divide LOST proceeds rather than submitting offers to the Superior Court. By reaching an agreement, the City and County saved the taxpayers 10s of thousands of dollars in litigation expenses, and, hopefully, the City and County have avoided any uncertainty resulting from the Supreme Court’s decision. I want to take this opportunity to again thank the County Commissioners for working with the City Council members to resolve this matter in a mutually satisfactory manner that benefits both city and county residents.”