On Monday, the Georgia Supreme Court ruled in favor of Dunwoody in one of the two outstanding HOST lawsuits pending between DeKalb County and its cities.

That very same day I wondered “What’s that mean for the other big HOST lawsuit, Decatur vs. DeKalb?

Welp, the AJC’s April Hunt was good enough to go out and look into it.

Officials in those cities were greatly encouraged by Monday’s ruling. As part of the decision, if the cities lose their challenge against the county they are entitled to the same deal as Dunwoody: a direct disbursement from the state Department of Revenue before it sends money to the county.

“It’s definitely an insurance policy for the cities,” Decatur City Manager Peggy Merriss said. “It’s very helpful to the position the cities have taken all along, that we are owed this.”

The problem is new bills could cripple the county, which never put any of the disputed HOST funds in escrow. It does not have the funds ready if it loses the ongoing suit with the other four cities.

The article even references the HOST hearing that the City Manager was attending when she replied in a quick note to me Monday.  That hearing – before DeKalb County Judge Mark Anthony Scott to determine HOST’s constitutionality at the Supreme Court’s direction – will result in a ruling some time later this year, according to the article.

And then what?  Why another appeal of course!

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.”

Read the rest of this entry »

Ty Tagami has a great piece in the AJC this morning, which summarizes all the lawsuits DeKalb County is currently fighting with its cities over the distribution of HOST.

Mayor Floyd is quoted in the article saying that Decatur has spent over a $1 million in litigation costs since the HOST legal battle began 9 years ago.  But, as he also points out, what’s at stake is around $1 million a year in capital improvement costs.

Again, DeKalb County refused to comment for a HOST article.

No surprises to report from Tuesday’s commission meeting.  The city commission voted unanimously to defer any plans of large scale annexation for two years.  (However, commercial on College Ave might still be on the table)

And this quote from the city manager reaffirms my suspicion that few were satisfied with the student enrollment data once the inconsistencies were brought to light,

“It appears we have time for some breathing room to get better data and do more research,”

But while this key data roadblock was what ultimately stalled the effort this go-round, I’m intrigued by the mayor’s reiteration that he believes the tax descrepancy between DeKalb and Decatur will shrink in the coming years.  He cites the incorporation of the City of Dunwoody as the main reason why DeKalb property taxes will soon come closer to parity with Decatur, so I thought I’d dig a little and see how the county is preparing for this loss of revenue.

Within CEO Ellis’ 2009 budget recommendations (pdf), he conservatively projects that the loss in property value from the creation of Dunwoody will raise the millage rate by 79/100 of a mill in unincorporated DeKalb, but also states “Final digest values, which will be available in May 2009, could have an additional impact on Tax Funds millage rates.” So bottom line: right now 79/100ths…but it could go up.

However, for now, the CEO plans to “nullify” this increase by dedicating more HOST money to property tax relief.  This sounds like a good temporary solution to not raising the millage rate, until we see just how temporary it could be.

As stated in the budget recommendations, HOST’s source of funding – sales tax revenues – are declining thanks to a down economy, plus the # of people who qualify for the HOST homestead exemption (owner-occupied residences) has increased more than 18,000 since 2000.

Add that to the outstanding lawsuit that Decatur and other DeKalb cities’ have against the county for short-changing them on HOST funding (Decatur estimates its owed over $8 million at last count) and it very well looks like the mayor’s prediction could be right.

And speaking of budgets, Decatur’s budget process for next fiscal year begins at the end of this month.  The schedule can be found HERE.

First on Decatur Metro: The Georgia Supreme Court just overturned the GA Appeals Court’s decision that ruled in favor of DeKalb County and its greedy withholding of the 1-cent sales tax money that rightfully belongs to DeKalb’s cities (over $8 mil due to Decatur at last count).

The reason?  The Supreme Court thought the Appellate Court overstepped its authority in deeming the original contract between the county and the cities as “unconstitutional”, since the term “services” had never been defined by the Supreme Court (which is its job).  Or at least that’s how I read the legalese.

But since the low-level trial court didn’t originally rule on this case, its getting thrown back to the Appeals Court to reconsider it again…this time without the option of deeming the contract as “unconstitutional”.

Now I’m no lawyer (can’t you tell?), but this sounds like a huge blow for the county.  Any lawyers out there want to weigh in?

The full ruling can be read here (or you can just read the summary after the jump).

As to why you should care about this case, take a look at this old summary I wrote back when the GA Supreme Court heard it, or just take the mayor’s word for it when he says you have two options for lower city taxes: annexation or winning the HOST ruling.

Also, a HUGE shout out goes to Thomas Wheatley, who provided me with this info that I’ve been waiting on for nearly 6 months!

UPDATE: The AJC picks up the story.

Read the rest of this entry »

…but still wants the city’s fair share of the HOST money.

Amen!  What’s the hold up GA Supreme Court?  Opine already!

After being killed in committee nearly a month ago, the bill to create a city of Dunwoody is back on the voting block this coming Tuesday (according to the AJC). I’m not sure what prompted the quick resurrection of the bill (maybe John over at Dunwoody North will fill us in) , but if passed this time around, citizens of the prescribed area would vote on city status this November.

So, why am I writing about Dunwoody in a blog about Decatur? Because my friends, even though we may proudly proclaim ourselves residents of Decatur first, we also pay taxes to another master: DeKalb County.

And why does that matter? Because DeKalb and all of its existing cities (Decatur, Avondale, Stone Mountain, Chamblee) love to fight over our tax money.

A quick recap: Every city that exists or is created within the county takes countless millions in property taxes away from unincorporated DeKalb. DeKalb understandably doesn’t like this and fights against city creation like an overprotective mother watching her son grow up and try to move out of the house. It also has horded much of the 1% Homestead Option Sales Tax (last estimates showed that Decatur was being underpaid by a cool $500,000) that the cities say is rightfully their’s. (The GA Supreme Court should decide this 7 year battle some time this year. A date has not yet been set.)

A quick aside…The other side of this coin is that it is usually the wealthier communities (with higher property taxes) that want to withdraw themselves from county services and ultimately that leaves the county’s poorest unincorporated areas with even less available funding to repair the countless problems that plague them on a daily basis.

So, how would the creation of another city, like Dunwoody, affect those in and around Decatur? Well, as Mayor Floyd has mentioned recently in talks about annexation, if Dunwoody becomes a city, unincorporated DeKalb residents should expect taxes to go up (due to a loss in the tax base) and county services to get even worse as a result. Around Decatur, this might affect the way people in our potential annexation areas think and subsequently vote on annexation into the city.

So, keep an eye on Dunwoody’s city creation and watch for when the Georgia Sumpreme Court finally rules on the HOST dispute. I’ll obviously report on both here. If Decatur can get its share of that 1% sales tax and/or can successfully annex more commercial land into the city, property taxes should come more in line with unincorporated areas (according to Floyd) while retaining the benefit of better services.