UPDATE: It’s fate!  City Manager Peggy Merriss responds to a DM inquiry on the Dunwoody HOST ruling…

I’m actually in HOST hearing right now. [City Attorney] Bryan Downs has mentioned it so hopefully it helps.

From a GA Supreme Court Press Release…

Note: This isn’t the HOST lawsuit that Decatur and three other DeKalb cities brought against DeKalb.  However, I’m currently trying to determine how this ruling might affect HOST distribution to DeKalb’s other cities, who have been fighting for 10 years for their fair share of Homestead Option Sales and Use Tax.

DEKALB COUNTY V. PERDUE ET AL. (S09A2016)

The Georgia Supreme Court has upheld as constitutional a 2007 amendment to the Homestead Option and Sales Use Tax Act (HOST). The amendment opened the door for the newly created City of Dunwoody to start receiving HOST money, sparking a lawsuit by DeKalb County against Gov. Sonny Perdue and the state Revenue Commissioner, challenging the amendment as unconstitutional.

But in today’s unanimous opinion, Chief Justice Carol Hunstein writes that the amendment “is not unconstitutional or illegal for any of the reasons set forth by appellant.”

In 1995, the state legislature established the 1 percent HOST and created 159 special tax districts whose boundaries are the same as those of Georgia’s 159 counties. Under the law, the tax could not be levied without a local referendum. DeKalb voters approved the 1 percent tax in 1997, with the revenues to go toward “funding capital outlay projects and…replac[ing] revenue lost to an additional homestead exemption of up to 100 percent.” In 2007, the legislature amended the HOST Act, providing that the state Revenue Commissioner would distribute HOST proceeds both to the county and to any “qualified municipality,” which the statute defines as “a municipality created on or after January 1, 2007…” At the time, only DeKalb and Rockdale counties levied a HOST, and neither contained a “qualified municipality.” The two are still the only counties with a HOST.

In 2008, the legislature approved the incorporation of the City of Dunwoody within DeKalb County. Dunwoody fit the definition of a “qualified municipality” and is due shortly to begin receiving HOST money that would otherwise go to the County. In 2008, the County – represented by former Gov. Roy Barnes – sued the State, its governor and the Revenue Commissioner, claiming the amended Act was unconstitutional. The trial court ruled against the County, which then appealed to the state Supreme Court. In its appeal, the County argued the trial court made at least six errors, including its finding that a voters’ referendum was not necessary to make a change in how the HOST is distributed.

But the high court disagrees. The amendment, today’s opinion says, “did not change the purpose of the HOST approved by DeKalb County voters when it provided for the distribution of HOST proceeds to the governing authority of each qualified municipality located in the special district.” The County also argued that by enacting the amendment, the Legislature violated the purpose for which DeKalb County voters approved the HOST. Clearly, when they voted in favor of it, the residents could not have anticipated that the Legislature would later change the distribution of the tax, the County argued. But, today’s opinion states: “It was the Legislature’s decision to amend the HOST Act so as to bypass the governing authority of DeKalb County and the intergovernmental agreement process in order to give a qualified municipality, e.g., the City of Dunwoody, HOST capital outlay funds directly.”

Attorney for the Appellant (County): Roy Barnes

Attorneys for the Appellees (Perdue): Thurbert Baker, Attorney General, R.O. Lerer, Dep. A.G., Warren Calvert, Sr. Asst. A.G.