The HOST case is back!

A press release announces that the decade-long HOST (Homestead Option Sales Tax) dispute between Decatur (and other DeKalb cities) versus DeKalb County over millions of dollars in HOST money will heard by the Georgia Supreme Court for a third time next Tuesday, February 8th.  Here’s all the background on the case, courtesy of the release.  Also it’s good to know that by last estimate, Decatur was owed $10 million in back HOST/capital improvement money by DeKalb County.

CITY OF DECATUR ET AL. V. DEKALB COUNTY (S11A0354)

This appeal stems from a dispute between four cities in DeKalb County and the county government over the distribution and expenditure of tax revenues. This is the third time this case has come to the Georgia Supreme Court.

FACTS: In 1998, the cities of Decatur, Chamblee, Doraville and Stone Mountain, along with other DeKalb municipalities, entered into a 49-year intergovernmental agreement (IGA) with the county to provide for the distribution of millions of dollars in sales tax proceeds. The agreement required the county to share with the cities a portion of Homestead Option Sales and Use Tax (HOST) money. HOST is a countywide one-cent sales tax approved by voters in 1997 to help offset property taxes. Under the HOST statute, 80 percent of the revenues must be used for that purpose, with the remaining 20 percent to be used to fund capital improvements. Under the agreement, the cities could use the money as they pleased as long as they were used for “capital outlay projects” within county boundaries.

Immediately after the county began disbursing the funds, the cities objected to the method the county used to calculate the amounts due to them, and in 2000, they sued. In response, the county filed a motion arguing it was prohibited by law from sharing HOST monies with the cities. The first time the case went through the courts, the DeKalb Superior Court ruled in the county’s favor, the cities appealed, the Court of Appeals upheld the lower court ruling, and the Georgia Supreme Court reversed it, sending the case back with direction. The second time, the superior court ruled in the cities’ favor, the county appealed, the Court of Appeals reversed that ruling, and in 2008, the state Supreme Court threw out the Court of Appeals decision, again remanding it to the lower courts because, the high court found, the Court of Appeals had overstepped its bounds by interpreting a provision of the state Constitution. In April 2010, the superior court again ruled in the county’s favor, finding that the agreement is unconstitutional. The cities now appeal to the state Supreme Court.