After Failed HOST Suit, Mayor Ready to Move On

Stone  Mountain Mayor Patricia Wheeler is ready to give up the city’s 11-year-old legal battle with DeKalb County over sales tax revenue even though the attorneys who led the court fight are considering another round.

“I think we’re kind of glad it’s past settled and we want to move on,” said Stone Mountain Mayor Patricia Wheeler on Thursday.

The Georgia Supreme Court on Tuesday dismissed a long-standing claim by the cities of Stone Mountain, Doraville, Decatur and Chamblee that DeKalb County has shortchanged the cities by as much $12 million in revenue collected from the Homestead Option Sales Tax since 1998.

Bob Wilson and Bryan Downs, the attorneys for the four cities, have said they may file a motion with the state’s highest court to reconsider the ruling.

“I think we’ve got grounds to explore,” Downs told Patch on Wednesday.

Downs declined to say what those grounds might be. The attorneys have 10 days from the date the ruling was issued to file such a motion, otherwise the court’s decision stands.

Stone Mountain’s share of the disputed $12 million was the smallest amount claimed by the four cities. Unless the high court reverses itself, the city will end up losing less than $250,000, according to court records.

Wheeler said the city is eager for the case to be closed so that Stone Mountain can begin tapping into HOST revenue as was provided by 2007 legislation that amended the statewide tax statute.

The court battle over HOST started as a fight over the funding formula under which the cities and DeKalb County had agreed to share revenue. It ended up as a protracted legal argument over whether the original 1999 agreements were constitutional.

The cities argued the contracts were constitutional. The county disagreed.

Since 2000, when the lawsuit was originally filed, the case has bounced several times between DeKalb County Superior Court, the Georgia Court of Appeals and the state Supreme Court, which heard the case three times before issuing the panel’s ruling on Tuesday.

The high court ultimately agreed with the county’s argument that the 1999 agreements violated the “intergovernmental contracts clause” of the Georgia Constitution.

That clause bars any government from sharing taxpayer funds with another unless it is for a specific service or the joint use of a facility. DeKalb County attorneys repeatedly argued that the contracts were nothing more than revenue sharing agreements.

However, in 2007 the Georgia Legislature made it possible for municipalities in counties with a HOST to get shares of the revenue when the body passed a bill allowing for the creation of the city of Dunwoody.

The new statute allowed Dunwoody, which was incorporated in 2008, to collect HOST revenue directly from the Georgia Department of Revenue instead of the county. DeKalb County argued that the General Assembly’s action subverted the will of the voters who adopted the HOST in a 1996 countywide referendum.

The Georgia Supreme Court rebuffed the county’s challenge to the amended statute in March 2010. The high court’s ruling allowed the four DeKalb municipalities suing the county to receive the same HOST benefit as Dunwoody, pending the outcome of the case.

It’s not clear when Stone Mountain and the three co-plaintiff cities can begin to tap into HOST. The amended HOST law states that in order to collect a share of the revenue in a given year, cities must be registered as “qualified municipalities” prior to July 1, in this case four days before the Georgia Supreme Court issued its ruling.

However, Wilson said the four cities should have been counted as qualified municipalities when DeKalb County Superior Court Judge Mark Scott in April 2010 ruled the 1999 agreements as unconstitutional and not after the July 5, 2011 high court opinion affirming Scott’s decision.

Residents of DeKalb County, including those who live in its cities, have been paying a penny on the dollar more in sales tax on all non-exempt purchases within its borders since 1998.

Under the statute, 80 percent of the revenue collected is used to increase homestead exemptions on property tax bills. The remaining 20 percent can be spent on government construction and infrastructure improvements.

However, unincorporated DeKalb homeowners have enjoyed deeper cuts in their property tax bills because the sales tax revenue can only be used to offset property taxes paid for county services. Residents who, for example, live in cities that have their own police departments still have to pay for those services through the property taxes they pay to those municipalities.

Wheeler said she hopes it won’t be too long before Stone Mountain can begin using HOST revenue to fund projects in the city. That includes renovating the old depot in Stone Mountain village.

“We’re just hoping we’ll get something out of it to help the town,” Wheeler said.