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UPDATE: LOST compromise reached

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Deal will increase Rincon's annual share by $250,000

Effingham County and the cities of Rincon, Springfield and Guyton have reached a compromise for the distribution of local-option sales tax (LOST) money.

The deal calls for the county to give up about 3 percent of its share and for Rincon to collect about 3 percent more.

The deal will mean Rincon will collect about $250,000 more each year for the next 10 years, while the county will have to come up with a way to operate with that much less money each year.

County Commissioner Steve Mason, who voted against the compromise, says all county taxpayers will face a bigger tax burden because of the deal.

The compromise calls for the funds from the penny-per-dollar to be divided according to the following percentages: county 74.41 percent; Rincon, 16.71 percent; Springfield, 5.86 percent; and Guyton, 3.02 percent. 

That’s a change from the current distribution of: county, 77.50 percent; Rincon 13.84 percent; Springfield 5.76 percent; and Guyton 2.90 percent.  

The agreement reached tonight means the parties won’t have to attend a court hearing that had been set for Monday to hash out their differences.

The governments have been working together since last summer to try to reach an agreement on how to distribute the money. When they couldn’t come up with a solution on their own or with a mediator, the issue headed to court. 

Distribution of the tax is renegotiated every decade, based on Census data. The debate is an important one, determining the fate of about $8.4 million a year countywide.     

How much people pay in property taxes could be affected by the way the money is distributed.  

Rincon argued that it has most of the retail business and should get a larger share of the tax. Springfield has said it hasn't been getting enough to compensate for having so much property that doesn't pay taxes, such as county buildings, schools and the hospital. 

The county argued that it really should receive all of the LOST money because service delivery agreements, entered into in April 2011, compensate the cities for the services that they provide.  

The sales tax provides revenue for local government services while reducing the tax burden to property owners.  

“We’ll have to find $250,000 per year more money,” Mason said. “If we can cut money out of the budget, we won’t have to raise the millage.”

The county commission approved the compromise by a 3-2 vote tonight, with Mason and Commissioner Phil Kieffer voting against it.

Kieffer said the deal might not be as good for residents of Rincon as it initially appears.

“You can charge a higher millage to city residents than unincorporated residents,” he said. “It may backfire.”

Kieffer said he wishes commissioners had been invited to the settlement conference where the compromise was reached.

“We weren’t notified until after the conference was over,” he said.

Commissioner Vera Jones said the county might have lost more money if the issue had continued in court.

The county commission and the cities all held special meetings yesterday and today to vote on the compromise.

Check effinghamnow.com next week for more about the deal.


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