County sues state over Dunwoody,
penny sales tax
by Andy Phelan
andy@dekalbchamp.com
Millar
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The battle over possible runaway bride Dunwoody and her golden business portfolio took a new twist July 10 when DeKalb County filed a lawsuit over the penny sales tax.
The county, represented by former Gov. Roy Barnes, is suing Gov. Sonny Perdue, the Department of Revenue and the state of Georgia over House Bill 264, which would change the way the HOST [Homestead Option Sales Tax] is dispersed.
The law, which was signed by Perdue last year, only takes effect if Dunwoody incorporates. Voters in the north DeKalb enclave of about 40,000 residents go to the polls July 15 to decide if they want to create a new city.
HOST, passed in a countywide referendum in 1997, is the penny sales tax that helps defray property taxes and pays to replace aging infrastructure.
Because HOST was passed by a referendum, Barnes said in the suit that Dunwoody’s incorporation couldn’t change the way it is distributed through the county without it going to all voters. That change, he said, would be unconstitutional.
State Rep. Fran Millar – author of 264 and Dunwoody cityhood – agreed that the law would change the way the HOST is distributed.
“The state will disperse its share of the HOST directly to Dunwoody, instead of going through the county,” he said.
More than $1.4 million of HOST proceeds are projected in Dunwoody’s yearly revenue stream. But Millar said that’s for the valuable business market, the Perimeter Community Improvement District.
“This money is to provide a pass through to Perimeter,” said Millar. “This is ridiculous. They’re just trying to intimidate people from voting for the city.
County CEO Vernon Jones, who signed the suit, could not be reached for comment.
But in a Feb. 14, 2007, memo from county Finance Director Michael Bell to DeKalb state lawmakers, the finance director made five points as to why he thought HB264 was flawed. Among the most important, Bell said that the law would set an unfair precedent in tax distribution and interfere with commissioners’ abilities to calculate the homestead exemption.
For the past eight years, the cities in DeKalb and the county have been locked in litigation over the HOST disbursement.
In 2000, after just one year of collecting the tax, four cities – Decatur, Stone Mountain, Chamblee and Doraville – sued the county, charging that they were not calculating the benefit properly under the agreement.
The suit is now before the state Supreme Court for the second time. Justices heard oral arguments in April with a ruling expected by September.
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