After a months-long stalemate between the county and three of its four cities, the latter of which have been angling for a bigger piece of the pie based on new LOST negotiation guidelines, a judge will formally decide between one of the two offers on the table.
While Walker County has been receiving 80 percent of the LOST funds for the past 20 years, since the tax was implemented in the county, the cities, with the exception of Chickamauga, have decided that splitting the remaining 20 percent between them does not provide enough financial return consistent with the services the cities provide to citizens living both in and outside of their boundary lines.
A study commissioned by the city of LaFayette and conducted by the Carl Vinson Institute of Government argued that a 50-50 split was defensible considering the nature of the county and city services when held up against the new guidelines. LaFayette, Lookout Mountain and Rossville thus joined together in an attempt to negotiate a higher percentage for all four cities.
The initial desire of the cities was to obtain a 65-35 percent split, which was changed to 70-30 after the county declared that such a cut in its share would be disastrous. Even a loss of 10 percent of LOST revenue, as would occur in a 70-30 split, would equate to about a million dollars per year removed from the county coffers.
The cities, however, say that $1 million or more, even split between the four cities based on population and services, would be a huge boon for their own operations.
"Something like $200,000 may not seem like much to the county when their own budget is about $20 million, but it's a lot to a city like Lookout Mountain whose yearly budget is only $750,000," said LaFayette city manager Frank Etheridge.
Etheridge filed documents to move for arbitration Tuesday morning, Nov. 27, ahead of the Dec. 1 deadline. Should the arbitration fail or be rejected, he said, then the entirety of the local option sales tax (LOST) will be removed until another election cycle with a new referendum can reinstitute it.