Fulton County wrestles with its cities over LOST distribution

Officials in Fulton County and its cities — from Chattahoochee Hills to Atlanta to Johns Creek — are fighting over how to divvy up billions of dollars in sales tax revenue.

• Failure to strike a deal could blow holes in the governments' budgets, meaning property tax hikes or program cuts, officials say.

What's happening: The county and the cities have until Dec. 30 to negotiate how to distribute revenue from a special sales tax that helps fund police, fire and other services and lowers property owners' tax bills.

Catch up quick: Currently, Fulton receives just under 5% (around $15 million) of the local option sales tax, or LOST. That amount funds countywide services. The rest is split among the county's cities based on their population.

• Fulton has proposed upping that to 35% — roughly $95 million more, says a consultant hired by the cities.

Details: The cities note that Fulton's unincorporated area has shrunk to less than 2 square miles and a population of less than 1,000 in 2020 — down from almost 230,000 in 2000 when it received 35% of the revenues. Fewer people should equate to a smaller cut of LOST funding, they say.

• In fact, the cities' consultant argues, Fulton should actually receive 2.45% of the LOST revenues — half of what it is getting now.

Yes, but: Fulton officials argue that the county operates services that benefit everyone, including the cities: courts, the jail, health centers and senior services. As the county's population has grown, so has the demand for these services.

• In addition to the more than $1 billion to fund those services, Fulton county manager Dick Anderson said that the county is overdue to build a 24-7 behavioral health center and potentially a new jail.

The big picture: Metro Atlanta's cityhood fever has created a confusing patchwork of fiefdoms and debates about how local governments should deliver — and pay for — services.

What's next: The county and cities continue negotiations. If they can't strike a deal, their options include hashing things out with a mediator — or going the arbitration route and letting a third party decide.