Sales tax would raise $1.6 million in revenue each year
Published 12:00 am Monday, January 19, 2004
If a proposed 1-cent sales tax for Marengo County passes through the Alabama Legislature, county government would raise its annual revenue by almost 60 percent.
On Tuesday, the Marengo County Commission voted 4-1 to pass a resolution levying a sales tax on the people who make purchases in the county. That resolution now must become a bill in the Alabama House of Representatives, and that bill must pass through both the Alabama House and Senate and be signed by Gov. Bob Riley.
After the resolution passed Tuesday, Commissioner Freddie Armstead indicated the tax would generate about $500,000 in revenue each year for Marengo County. Armstead was clear to point out that he didn’t know exact figures, but he also indicated commissioners were first told a new 1-cent sales tax would generate “much less” than $500,000.
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“We didn’t really believe that,” Armstead said Tuesday. “We thought it was pretty low, based on past experience.”
Based on past experience, $500,000 is also quite a bit low. The private company that collects sales taxes for the county said revenue from a current 1-cent sales tax is, indeed, much more than $500,000.
Pete Yonce, who works with AlaTax in Birmingham, said Marengo County collected $1.6 million during fiscal year 2003 from an existing 1-cent sales tax.
However, that 1-cent sales tax is not part of the county commissions’ annual revenue, according to Marengo County Administrator Dawn Quinney.
“There’s some confusion in what that money goes to,” Quinney said. “The revenue from that tax goes straight to the county school system.”
The tax proposed Tuesday would not be allocated to any particular entity of the Marengo County government. Though details of expenditures have not been released, the tax revenue would go straight to the county’s general fund budget, and then be dispersed from there.
And according to the past four years, county government stands to increase its revenue by 58 percent. In the fiscal year 2004 budget passed in September by commissioners, the county projected revenues of $2.8 million. Should this tax pass, county revenue would spike to more than $4.4 million. In the same budget, Marengo County is projected to spend $2.87 million this year.
Adding credibility to the amount of revenue generated from the proposed sales tax is the history of another 1-cent sales tax levied by the county.
In 1999, a sales tax levied for construction of a new jail, ended — though some fought to keep the tax in place. During the last year of the tax, from October 1998 – September 1999, that tax generated $1.49 million, according to Quinney.
The discussion over where revenue from the new tax will be spent is still premature. Thursday, State Reps. Bobby Singleton and Thomas Jackson both said they were unaware of the detail of the tax and where the money would be spent. They also suggested the public should be involved in the decision, and agreed that a public hearing should be held in the county.
In media reports Thursday, Armstead indicated a public hearing had been held on the issue. However, few attended and publicity was minimal, at best.
Friday, State Sen. Hank Sanders, who represents part of Marengo County, said he was not in a position to talk about the tax because he had not spoken with commissioners yet.
Sanders, D-Selma, would be instrumental in either passing or killing the proposed sales tax because he is part of the county’s local delegation in Montgomery.
Considered one of the most powerful political leaders in the state, Sanders said he would work with commissioners to discuss the tax and their presentation of the tax to the public.
“Until I talk to them, it’s probably best that I not really talk about it,” Sanders said.