Council approves tax on lodging
Published 12:00 am Friday, November 4, 2005
DEMOPOLIS-The lodging tax, which was discussed by the Demopolis City Council at its previous two meetings, passed Thursday night by a 4-2 vote. Councilmen Woody Collins, Melvin Yelverton and Jack Cooley all voted in favor of the tax with Thomas Moore and Charles Jones opposing.
Prior to last night’s final vote, the council first had to propose the tax at its Oct. 6 meeting and hold a public hearing at its Oct. 27 meeting. During the public hearing, one local hotel owner said he was neutral on the tax, but would like to see a reward system for timely payments.
“The only thing I would like to add is if we are going to include a lodging tax, I would like to add if we are going to pay within a certain time we should expect a little bit of a break for that,” Days Inn owner Nick Patel said. “There do not seem as if there are going to be any breaks if we pay on time.”
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When the final version of the tax was approved, the reward system was excluded.
During discussions of the lodging tax council members presented their reasons for support or opposition.
Cooley, who was in favor of the tax, said it would be helpful in funding the $6,200 allotted for the Welcome Center, $61,172 allotted for the Theo Ratliff Activity Center and $100,000 a year for the Demopolis University Center for a grand total of $167,372 in expenses. Cooley said the previous council presented the allotments.
Moore, who opposed the tax, said the programs are unfunded mandates. The previous council, Moore said, determined that those three initiatives would be more than adequately funded through existing revenue sources, as well as the normal growth in revenues.
Moore, who has been a member of the council since 1992, said the finance committee’s budgets have resulted in the following: Actual revenues exceeded budgeted revenues between 3-6 percent and budgeted expenses exceeded actual expenses between 5 and 8 percent. In absolute terms, Moore said, a revenue carryover was produced each year.
Therefore, Moore said, with the carryover funds and normal growth in revenues, the previous council properly allowed for more than adequate funding sources for the three initiatives alluded to earlier.
The lodging tax was just recently increased to offset any potential loss of revenue due to a limit that was set on tobacco tax by The Alabama Legislature Moore said. Because of this increase, Moore said he did not think it is fair to keep taxing one segment of our businesses in Demopolis.
The idea of increasing rates was a hot issue throughout the process, but Cooley said the increase would not be drastic. He said the three largest motels in Demopolis averaged $55.66 per night. Hotels in Selma averaged $59.97, Tuscaloosa averaged $70.66 and Meridian averaged $84.40.
The increase per room will add an average of 55 cents, which was still almost $4 per night cheaper than Selma, $14 less than Tuscaloosa and $28 less than Meridian.