• 77°

Councilman formally introduces discussion on sales tax increase

Demopolis City Councilman Charles Jones presented to the mayor and council a proposal for increasing the city’s sales tax during a meeting Thursday.

Jones’ proposal included an increase of 1-cent sales tax with those funds being distributed evenly to the Demopolis City School System, Bryan W. Whitfield Memorial Hospital, as well as streets and infrastructure projects. He presented a motion draft in favor of the tax increase, describing it as a “working document” as a way to get the conversation started.

“We listened to presentations from the hospital, which needs help with indigent care, and the schools are in dire straights with facilities, and I do think it will take new money (to assist the hospital and schools). I think we could do a lot (with the added revenue),” Jones said.

He proposed the amount going to the school system would return to the city once the system pays off any bond issues related to a construction project.

According to Jones, the 1-cent increase would add about $1.5 million annually for the city.

Currently, consumers in Demopolis pay a 9 cents sales tax with three cents of that designated to the city. The remaining six cents is split: 4 cents for state and 2 cents for Marengo County.

Mayor John Laney said he felt increasing the city’s sales tax would be a mistake and would favor a different approach.

“The hospital is utilized by residents throughout the county. I would favor putting to voters a millage (property tax) increase to support the hospital and a city millage increase to support the school system. Let’s allow the citizens to voice what they want. But, I welcome the debate,” Laney said.

Property tax increases do require a vote of the people while a city sales tax increase can be approved by a vote of the council.

Laney also said he fears consumers outside of Demopolis may choose to go to cities with lower tax rates.

“People in Sumter County may choose to go to Meridian instead of Demopolis, or those in Eutaw may go to Tuscaloosa,” Laney said.

Meridian’s tax rate is 7 percent while Tuscaloosa’s is 9 percent.

(This article originally appeared in the Saturday, September 8 issue of the Demopolis Times.)