The News Courier in Athens, Alabama

Local News

October 14, 2012

Council members share differing views on tax hike proposal

— Athens City Council may have to vote within the coming three weeks if they hope to pass a penny sales-tax increase any time soon.

Two of the five council members — Milly Caudle and Jimmy Gill — recently proposed that the council consider adding a 1 percent sales tax, which would generate an estimated $4 million a year for the city.

Consumers currently pay 8 percent — or 8 cents — on every dollar they spend in the city. Of the 8 cents on every dollar, 4 cents goes to the state and 4 cents are split evenly between the city and Limestone County.

In late September, Mayor Ronnie Marks sent a draft of how additional money might be spent if the council approved a penny sales-tax increase. However, the council would ultimately decide how the money would be distributed. Among items on the mayor’s tentative list are:

• Infrastructure;

• City schools;

• City of Athens General Fund;

• Athens-Limestone Public Library and Houston Memorial Library;

• Tourism, Spirit of Athens, special events;

• Industrial development and retail development;

• Contingency fund or debt repayment.

Although Gill has said raising sales tax is one possible way to go, he also said there was no immediate plan to raise sales tax revenue and that the council would have to get information out to citizens before acting on such a measure.

When asked Friday about approving a penny sales tax increase, Caudle told The News Courier following a special meeting, “I am definitely in favor of it. We can’t wait for the newly elected, we have to do it before the end of this session.”

If Caudle and Gill supported a tax hike they would have to also secure one more vote, possibly from Councilwoman Mignon Bowers. Bowers could not attend Friday’s meeting in order to share her opinion of possibly raising the sales tax.

Council members Harold Wales and Jim Hickman seem to be leaning toward “no” for now, mainly because they don’t seem to like the time frame in which the council would be asked to study such an increase.

“I don’t think we have enough time to look at it before Nov. 5,” Hickman told The News Courier. “The council passed a balanced budget and we have substantial surplus. I’m sure the new City Council members would have some ideas on it, too. I’m not saying I’m against it, I’m just saying there is no real rush.”

However, Hickman leaves office Nov. 5. He lost his re-election bid in August. Bowers and Caudle, who did not seek re-election, will also be replaced Nov. 5.

And although the council plans to include incoming council member to review and discuss whether to raise the tax and how it would be spent, the newcomers would have no voting power until Nov. 5. Once they are sworn in, they may not be willing to back a tax hike their first year in office.

“The City Council needs to sit down and have a serious discussion on the needs and how the money would be spent,” Wales said. “It’s a big enough decision to invite the new council members.”

The city had both economic gains and losses this past fiscal year.

They are projecting a $220,00 increase in gross sale-tax receipts and a $15,000 increase in the city’s franchise tax as well as $10,000 more in lodging tax and $14,000 in the $1-per-night lodging fee, for a projected increase of $259,000.

However, the council is also expecting a $195,000 decrease in TVA-in-lieu-of-tax funds. Last year, the state Legislature cut 6 to 10 percent of those funds. The city court system is expecting about an $83,500 decrease in revenue due to fewer tickets and the resulting fines. Also, three departments are currently over-budget by a total of $116,220 — recreation, cemetery and sanitation.

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