A $240 million accounting error is creating a windfall for many local taxing bodies, but a drain for the state budget.

Finance officers for local school systems mentioned a boost in special purpose local option sales tax for education revenue in September during October meetings. Bremen City Schools received an additional about $167,000 while Haralson County Schools received an additional about $200,000, their respective finance officers said.

Additionally, the cities and Haralson County also received the inflated local option sales tax payments. Haralson County received $167,735 in August and $344,661 in September. The city of Bremen received $90,765 from Haralson County LOST in August and $186,504 in September. The city of Tallapoosa received $54,371 in August and $111,721 in September.

“I did a happy dance when I saw our September SPLOST numbers,” Allen Pullen, finance director for Bremen City Schools, told the Board of Education members at their meeting. “The Haralson SPLOST was over $268,000; Carroll SPLOST was over $102,000. Our average on Haralson is about $135,000; average Carroll is about $65,000.”

The boost in SPLOST and LOST for the local taxing bodies was the result of an error found in a series of audits conducted by the Department of Revenue, said Mason Rainey, who is currently handling media inquiries for the Department.

“It was found that the returns of a number of business taxpayers had misreported the state and local allocation of a significant portion of their remitted sales tax from late 2015 to early 2018,” Rainey said by email. “All of the companies used the same tax accounting software that contained this error causing significant amounts of payments to be incorrectly attributed to state sales tax.”

The Department spent about 400 audit hours reconstructing the local sourcing for the misreported transactions in order to send the money to the correct taxing bodies, he said.

“The distributions to local jurisdictions, which occurred in September 2020, totaled approximately $240 million,” Rainey wrote.

That money was taken from the state’s general fund, Pullen said, and that worries some local politicians.

“The state’s already spent that money over the years,” said Bremen Board of Education member Brandall Lovvorn.

He wondered if the state might try to recoup that money.

“The pessimistic side of me worries — because the coffers are the coffers,” said Bremen Superintendent David Hicks. “Is that going to be made up somewhere else in 2022.”

Tate Mitchell, communications manager for Gov. Brian Kemp’s office, declined to comment on how this might affect the budget moving forward and referred inquiries to the Department of Revenue.

Cities aren’t as dependent on state dollars, said Perry Hicks, Bremen city manager. The cities collect property tax dollars, business license fees and sales tax proceeds to operate, he said.

“We’re very locally oriented,” City Manager Hicks said.

The LOST revenue reimburses the city for projects it has already done, he said, so this money will just go in the pot to continue down the list of projects.

Philip Eidson, city manager of Tallapoosa agreed.

“We just have this list of projects that we work on,” Eidson said.

The projects for water, sewer, police will get a little boost, he said.

But he noted, “The state’s probably running a little tight on their budget.”

The proposed ESPLOST extension is on the November ballot.