By Alton Mitchell
The LaFayette City Council held a special public hearing on last Tuesday evening. The purpose of the meeting was to get public input on the proposed sales tax increase the council members have been debating the past few months. As the meeting unfolded it showed residents are not entirely opposed to the sales tax increase, but are unsure if the time is correct to increase taxes in LaFayette.
A increase of one-percent on the local sales tax is something that council members have been flirting with over the past several months since the idea was first proposed by councilmember Michael Ellis. Many council members appeared to be open to the idea when it was first brought up, but as time has progressed it seems that members of the city council are now defining which side of the fence they find themselves on.
Mayor Barry Moody explained that the public hearing is only to get public input on the possibility of raising the tax rate. Tuesday’s meeting yield four residents that came to give input and ask questions about the possible tax increase. The number of attendees at the second meeting was up from only one resident who showed up to the first meeting last month.
Resident Terry Mangram was one of the first residents to speak to council members. “My concern is the cause or reason for the increase, and will the increase be temporary or permanent,” asked Mangram to members of council.
When the idea was proposed it was first thought that the funds generated by the tax increase could be used for local infrastructure improvements on items such as roads, waterlines, electrical upgrades, and the water department. However, at the previous public hearing it was pondered that the generated revenue should go into the general fund and be used for projects as they come up.
Resident John Carothers expressed concerns on how the increase in tax may impact business in LaFayette. “LaFayette is 1% in the range of local vibrant communities. An increase would put the city of LaFayette on the high end of the sales tax. This can lead to limited growth in LaFayette and I don’t see a positive outlook on growth in LaFayette,” explained Carothers while implying the tax increase may limit commercial growth in the city.
City officials have noted that presently LaFayette has one of the lowest sales tax rates in the region at 9%. Other cities in the area have a rate of 10% or greater. A resident who attended the meeting by the name of Chuck was curious about the overall budget of the city of LaFayette and what amount of the budget was generated by sales tax. City Clerk Louis Davidson stated that he believes about 15% of the local budget is generated as a result of local sales tax. That 15% is equivalent to about $1,000,000 annually being pumped into the local budget.
City officials are unsure exactly how much will be generated annually if the sales tax is increased to 10%. However, early estimates drive the figure to an estimated $200,000 annually being pumped in from the extra sales tax dollars.
LaFayette finds itself in a unique spot as it has a lot of self-sustaining services for a city its size. These include a full-time police and fire department to service residents of the city. Mayor Barry Moody points out that of 50+ comparable cities in Alabama, many do not have these services provided by their city.
Officials are not looking to eliminate any city services as the they explore options to generate additional revenue. During the public hearing it was pointed out that LaFayette does operate on a balanced budget annually thanks to the hard work and number crunching by City Clerk Louis Davidson. Despite the budget being balanced there are things that are needed that are put off.
LaFayette officials also find themselves working with less funds than they once were generating annually. During the meeting officials brought up the fact that LaFayette’s budget lost near $2,500,000 annually when Russell Corp. and Frontier Yarn ceased operations at plants in LaFayette. These two companies were two of the largest utility customers in the city.
While speaking on the manufacturing sector of the city one resident questioned if the new solar plant being constructed in LaFayette would have an impact on sales tax revenue for the city. Council members stated that there will be little to no sales tax revenue generated from the new solar facility.
The residents who attended the public hearing stated that they are not in complete opposition to the sales tax, but would like more information on exactly what it will be used for. Members of the city council also seem to be getting closer to formulating ideas on where they stand on the issue. Two city councilmen, Matthew Hurst and Toney Thomas both stated that they had received input from residents in their districts. Both council members stated that following the resident input they received in opposition to the tax increase they will both be voting against the tax increase at this time.
Council members continue to seek public input on the local opinion of the tax increase proposal. Officials plan on holding one more public hearing in the near future to receive public input before voting on the tax increase. The LaFayette city council encourages people to come out for the next meeting when it is announced.