City Schools of Decatur Administrative Offices. Photo by Dena Mellick

Decatur School Board member Lewis Jones last year asked a simple question about alcohol taxes collected by the city.

He wanted to know why City Schools of Decatur didn’t receive a portion of the alcoholic beverage excise tax. The city has been keeping all of this tax for decades, but CSD Finance Director Susan Hurst, who used to work for DeKalb County Schools, said the county received a portion of the tax.

When CSD first approached the city a year ago, the city said it had no legal obligation to provide this money. But the city has reversed its position. Decaturish columnist and former Deputy COO of the City of Atlanta Hans Utz noticed it in his recent column about the city of Decatur’s proposed 2015-2016 budget.

Utz wrote that, “Starting this budget year, Decatur will transfer one-half of net revenue related to the sale of alcohol to the City Schools of Decatur. In 2015-2016, the transfer is expected to be nearly $300,000. That is the largest portion of the anticipated revenue decrease.”

Decatur City Manager Peggy Merriss provided a statement to Decaturish about the alcohol tax, but didn’t specifically say the city had reversed its position on whether it owes CSD a portion of it. But that appears to be exactly what happened.

“The Board of Education made a claim based on a 1972 local constitutional amendment that was adopted in connection with the approval of liquor by the drink in DeKalb County,” Merriss wrote. “This local constitutional amendment required payment of one-half of net revenues collected from ‘legalizing, controlling, licensing and taxing of the wholesale and retail sale of said beverages’ to school systems located within DeKalb County. Since liquor by the drink was not approved in the City of Decatur until 1977 and the Georgia Constitution no longer allows adoption of local constitutional amendments, the provisions of the amendment were unknown to City staff and to staff of the City Schools of Decatur for over forty years.”

The city knows now, and Jones’ inquiry will mean thousands more in tax money for the city’s schools. Merriss did not directly respond to a question on whether the city would pay CSD the money it unknowingly withheld for decades.

“Because the City’s budget had already been developed and approved for fiscal year 2015, it was determined that the City would transfer the revenues beginning in fiscal year 2015-2016 and the proposed budget reflects that transfer,” Merriss wrote.

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