Is there a proper way to increase taxes that will gain the understanding of Alabama citizens and/or Florence citizens? Let’s review the gas tax increase that was recommended by Governor Ivey and the sales tax increase recommended by Mayor Holt and the Florence City Council, and determine which method was the proper one and citizen friendly.
The state gas tax: Prior to elected representatives reporting to Montgomery for the start of the Legislative session beginning on March 5, 2019, Governor Ivey announced her intention to ask for a 10-cent increase in the tax to repair Alabama. This allowed local citizens time to share their opinion prior to their representatives leaving for Montgomery. Governor Ivey did not call for a vote on March 5! The vote was taken Tuesday, March 12 and the increase was approved. That increase will not take effect until October 1, 2019. Citizens have time to budget the increase. The increase at that date, will be 6¢, with additional 2¢ increases in 2020 and 2021, bringing the total tax to 28¢/gallon.
The Florence sales tax: The vote to increase the sales tax from 8.5% to 9.5% was approved by the Florence City Council at their January 15, 2019 meeting. The effective date of the increase was March 1. At the January 15 meeting Mayor Holt showed a video that described the needs for the increase. This was the first time citizens were aware of the video. The proper action by the Council should have been to delay their vote until the next Council meeting on February 5. Several citizens, who learned of the resolution to increase sales tax on the City’s web site, asked the Council to delay their vote to give citizens more time to provide input. Those requests were ignored. More information would have been provided on citizens comments at the meeting from Jan. 15, however the Council has not posted any minutes from ANY meetings since September 18, 2018! Council President Jordan stated that the reason for approving the sales tax with an effective date of March 1 was due to the pay increase, for police and firemen, beginning April 1. Jordan also stated, “to do that, a month’s worth of the funding from the tax increase needs to be in place.” I disagree.
Using city estimates, $102,312 is the monthly amount needed for the pay increases. Certainly, the city could adjust their budget for a month or two in order to allow for citizens’ input and have funds for the pay increases. Use reserves! The council, with support from the mayor, chose not to do this. The increase in the sales tax, again using city’s estimates, will generate yearly revenue of $10,546,860 with $527,340 going to Board of Education. Therefore, $10,019,520 will be available yearly for the city’s needs, $834,960/monthly. In five years the increase will provide $50,097,600 for needs of the city. This is too, too much. The increase should not be forever!!
It is recommended that the Florence City Council take immediate action to reduce the tax rate to 9.0% for a period that will end on December 31, 2019. Prior to this date the future needs of the City will be reviewed which will determine if the rate remains at 9.0% or returns to the 8.5% rate. The needs and cost must be shared with citizens prior to continuing with the 9.0% rate. .
Our governor was aware of the action needed to ask for a tax increase in a proper manner.
Our mayor and our city council were not aware!