2012 lost presentation may 21, 2012. to provide property tax rollback equal to the distribution of...

Glynn County2012 LOST Presentation

May 21, 2012

To provide property tax rollback equal to the distribution of the LOST O.C.G.A. §48-8-91

Is the Condition Precedent for the existence of the tax

May be expended to fund services

Eaves Consulting Group L.L.C. 2

Purpose of LOST

Shall analyze local service delivery responsibilities

Examine the existing allocation of resources

Make rational the allocation of those resources

POPULATION IS NOT ALWAYS IN DIRECT CORRELATION TO SERVICES

O.C.G.A. §48-8-89 (D)(1)


Where to Start

The sub-divisions shall at a minimum consider the criteria specified in subsection (b) of this Code section. §48-8-89 (d)(1)

1. Service Delivery Responsibility to daytime population2. Service Delivery Responsibilities to resident population3. Existing Service Delivery Responsibilities 4. Impact on Short and Long term debt5. Point of Sale6. Intergovernmental Agreements7. Tax and Fiscal Equity8. Service Delivery Agreements

Eaves Consulting Group L.L.C.

Shall be based on!

How to consider

How to measure

How to weight the criteria- Not all equal

In mediation/arbitration both sides must be able to show that they did consider all of the criteria, how they measured, and make rational the linkage


What the law does not tell us

Needs to be mutually exclusive Residential Service Population Daytime Service Population General Fund Expenditures Tax Digest Commercial/Industrial Digest Taxes Levied Tax Equity


Relevant, Independent and Reliable Data


Must Link to CriteriaCriteria to be Considered Metric to be used

Criteria Criteria Tax Equity

Population Daytime Expenditures Digest C/I Digest

Tax Demand

1 Service Delivery Responsibilities to Daytime Population

x x x x

2 Resident Service Delivery Responsibilities

x x x x x

3 Existing Service Delivery Responsibilities

x x x x x

4 Long/Short Debt x x 5 Point of Sale x x x 6 Intergovernmental

agreements x

7 Tax/Fiscal Equity x x x

8 Service Delivery Strategies

x x x x

the county whose geographical boundary is conterminous with that of the special district and each qualified municipality therein receiving any proceeds of the tax shall adjust annually the millage rate for ad valorem taxation of tangible property within such political subdivisions as provided in this subsection. O.C.G.A. §48-8-91 (a)

See Martin v. Ellis 242 GA 340 for county wide roll-backs (Un-equal roll-backs disallowed)


What the Law does tell us!

O.C.G.A. § 48-8-81. Creation of special districts

Pursuant to the authority granted by Article IX, Section II, Paragraph VI of the Constitution of this state, there are created within this state 159 special districts. The geographical boundary of each county shall correspond with and shall be conterminous with the geographical boundary of one of the 159 special districts.

There is also case law on this point in Nielubowicz v. Chatham County 252 GA 330


Special Districts

http://web.lexisnexis.com/research/buttonTFLink?_m=7317c020324d6b563d0c5a67220a38f9&_xfercite=%3Ccite%20cc=%22USA%22%3E%3C!%5BCDATA%5BO.C.G.A.%20%A7%2048-8-81%5D%5D%3E%3C/cite%3E&_butType=4&_butStat=0&_butNum=1&_butInline=1&_butinfo=GA%20CONST%20IX%20II%20VI&_fmtstr=FULL&docnum=1&_startdoc=1&wchp=dGLbVzB-zSkAz&_md5=d52e2647ece42d625fd55e4beabc5078

Service Delivery Responsibilities to Daytime population

Daytime Population and General Fund Expenditures


Criteria One

Service Delivery Responsibilities to Residential Population

Residential Service Population and General Fund Expenditures


Criteria Two

Uniformity and Equity RSP validated by equal impact


Equal Benefit

Existing Service Delivery Responsibilities General Fund Expenditures


Criteria 3

Total Tax Demand to pay for Services


Criteria 3

Share of Property Taxes at Gross Millage to negate roll-backSub-Division Net Value Gross Mill Tax Dollars DistributionCounty-Wide $4,539,633,137 8.223 $37,329,403 76.74%Brunswick $341,891,420 33.098 $11,315,922 23.26%Combined Property tax and Sales tax to reflect total tax needfor General Fund Budget

Cost to service infrastructure Measured by Total Digest Share


Criteria 3

Impact on Short and Long term debt

Used General Fund expenditures including annual debt service

Do not consider debt tied to revenues bonds or enterprise funds


Criteria 4

Point of Sale

Sales measured at County Level by Department of Revenue

No independent, verifiable accurate information for POS at municipal level

Not mutually exclusive every sale in city also in county

How to consider?


Criteria 5

Commercial/Industrial Digest Cost of Community Services for Commercial

and Industrial services cost .40 for every dollar of revenue

Revenue producer for Municipalities


Point of Sale

Subdivision C/I Digest DistributionCounty-Wide $1,330,480,636 84.42%Uninc. $1,084,999,799Brunswick $245,480,837 15.58%Effective Total $1,575,961,473 100.00%@ Gross C/I Digest 40% Valuation

Commercial/Industrial Digest Ratio

Sales Tax is a transaction tax on the consumer not the collector

Benefit accrues to the taxpayer not collector

How not to measure-◦ Self reported economic surveys◦ Zip Codes do not follow municipal boundaries◦ Data that uses estimates and administrative

records◦ Non Mutually Exclusive Data


Point of Sale


Problem with Zip Code Data

Point of Sale DataUsing Flawed Data

Gives County credit for Unincorporated onlyCounty sub-division is entire area

Reflects accurate Service Delivery ResponsibilitiesMutually Exclusive DataData still based on estimates from 2007

Brunswick Calculation County Calculation


Unincorporated Glynn 7,100,468 40.59%Brunswick 10,394,759 59.41%Total Glynn County 17,495,227 100.00%

Sales Shipments and Receipts

Brunswick 10,394,759 37.27%

Glynn 17,495,227 62.73%

Total 27,889,986 100.00%

Sales Shipments and Receipts

County funds Economic Development $800,000 from General Fund

Two new restaurants opening in Brunswick◦ Olive Garden ◦ Red Lobster

Pinova expansion King and Prince Seafood expansion County is building point of sales and city

digest value


Developing Point of Sale Value

Intergovernmental Agreements◦ Needed to Cover “Supplemental Powers”◦ None that currently affect LOST distribution

Tax Collection for City Sidney Lanier Bridge Lights Animal control center Tourism


Criteria 6

Fiscal Equity-

◦ Do Municipal taxpayers pay for any Countywide services? None Identified

◦ Do Unincorporated taxpayers pay for any municipal services? Identified two Fiscal Equity issue that need to be

addressed


Criteria 7 Fiscal and Tax Equity

Library- Supplemental Power under Constitution Ga. Const. Art. IX, § II, Para. III(10)

SDS states service is countywide and paid jointly by City and County

County pays $275,000 City pays -0- City Share should be $53,000 based on

population percent .30 credit to LOST Formula


Fiscal Equity

Traffic Control Devices- Supplemental Power under Constitution Ga. Const. Art. IX, § II, Para. III(4)

SDS states service in incorporated area will be provided by Brunswick

County provides maintenance◦ County residents paying for Municipal Services


Fiscal Equity

Does the unincorporated taxpayer pay for all services delivered “exclusively” in the unincorporated area?◦ Unincorporated Expenditures=$5,497,531◦ Unincorporated Revenues= $5,801,008

No Tax Equity Issue Identified

In fact, Fiscal Equity Issue- Unincorporated Revenues paying for Countywide Services


Criteria 7- Tax Equity

Existing Service Delivery Strategies◦ Negotiated in Good Faith in 1999◦ Amended in 2008◦ No overlap or duplication of services◦ No Double Taxation issues

Consider impact of changes since last LOST Negotiations◦ City stopped funding library services .3% Credit

Offset ◦ City stopped funding Development Authority .87%

Credit Offset


Criteria 8

If any differential county services exist the remedy is in the Service Delivery law:◦ Special Taxing District◦ Rollback on county tax millage for incorporated

area◦ Re-designation of unincorporated revenue

The remedy is not to give municipalities more LOST revenue for city services


Service Delivery Issues


HB 489 rollback for County

PT-35 (Rev 02/09)

COUNTY MILLAGE RATE CERTIFICATION FOR TAX YEAR 2011

Please provide a copy of this form to your county's Clerk of Superior Court.

http://www.etax.dor.ga.gov/ptd/download/index.aspx

COUNTY:

Submit three (3) original signed copies with digest submission

COLUMN 1 COLUMN 2 COLUMN 4 COLUMN 5 COLUMN 6 COLUMN 7 COLUMN 8 COLUMN 9 COLUMN 10

District District Name Mark X if Mark X if Enter Gross Sales Insurance Duplication of Net M&O Enter TotalNumber (Inc, Uninc, School, District Falls In District Falls In Millage Rate Tax Premium Services Rollback Millage Rate Bond Millage RateMust be Special Districts, Unincorporated Incorporated Before Rollback Rollback Pursuant to Column 4 less Millage Column 8 plus Shown Etc.) Area Area Rollbacks OCGA § 48-8-91 OCGA § 33-8-8.3 OCGA § 36-70-24 Columns 5, 6 & 7 Rate Column 9

COLUMN 3

Property Tax Relief- Dollar for Dollar rollback◦ Benefits fair and balanced◦ Equal benefit for all taxpayers under the law◦ Uniformity

Primary reason Glynn County and Brunswick needs to change current distribution formula


LOST: Condition Precedent

Current Distribution- Need to equalize


Property Tax Relief- Equity


Per Capita Benefit

Two: One ratio is fair. It covers differential service paid for by two digest-

Three: One distribution ratio is inherently unfair

Location Current Dist. % LOST (2010) Population Per Capita BenefitBrunswick 35.00% $6,245,085 15383 $405.97

Glynn 65.00% $11,598,026 79626 $145.66Total $17,843,111

Brunswick UnincorporatedBenefit from City $405.97 0Benefit from County $145.66 $145.66Total Benefit from LOST $551.63 $145.66Total Benefit/County $3.79 $1.00

Considering all Criteria Using available measurements County Position


Composite Distribution Formula

Location SDS Population Daytime Population Tax Equity P+S=N Expenditures Digest C/I Digest Taxes Offset Proposed Current Change

Glynn 83.81% 78.95% 77.87% 75.71% 93.00% 84.42% 76.74% 1.17% 81.31% 65.00% 16.31%Brunswick 16.19% 21.05% 22.13% 24.29% 7.00% 15.58% 23.26% -1.17% 18.69% 35.00% -16.31%

Metric Sales Tax Allocation

2012 lost presentation may 21, 2012. to provide property tax rollback equal to the distribution of...

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