The ordinance adopted will raise the tax, which applies to any business that routinely provides lodging for transients, from 6 percent to 9 percent. The 50 percent increase goes into effect Dec. 1 and is estimated to generate an additional $70,000 annually.
After the meeting, Council President Rocky Lucas said this was identified as an area of potential revenue growth because it is “something the citizens of Sylacauga will not directly see,” meaning it primarily affects visitors. The increase, he said, “will provide the city with some much-needed cushion in our budget and perhaps get some funding for some appropriations that are very important to our city.”
The council did not talk with any local hotels before making this decision, he said.
“This is something we decided to do,” Lucas said. “The hotels won’t be affected. They’ll basically just pass this on. It won’t necessarily change what they’re doing as a room rate; it’ll just have a 3 percent extra tax. So, on a $100 a night room, you’re looking at $3. The cost per visitor is pretty trivial, but it can add up to a large amount of money for (the city).”
Roberts said he voted against the increase because he is “not sure raising taxes should be the first step in raising revenues. There are other, more positive things we could do. In this case, I worry that raising the rate of an economic-based tax, like sales tax or lodging tax, can start affecting how people spend their money. I don’t want the ‘business’ business we get at our motels to start staying somewhere else because it suddenly got more expensive to stay here. I hope that doesn’t happen.”
At a budgeting work session Monday night, Councilman Joe Hogan said he sees it as a way to make up some of the $427,000 budget deficit experienced last year. This year’s proposed budget, which is hoped to be approved by Nov. 1, has an $18,000 surplus, but achieves that by cutting most appropriations 10 percent and utilizing about $800,000 from savings.
“Surely nobody in their right mind expected to get the same appropriation they had last year after that crazy budget that was passed,” Hogan said. “In knowing that we started out in that deficit, we’ve got to be creative. Maybe it’s raising a tax, but it’s not raising tax on our citizens, our voters, our residents. Its people passing through, so it’s a creative way to bring money in without raising a tax that people are going to shoot us over.”
Lucas said the average lodging tax rate in this area of the state is 7 percent, according to his research, though it goes as high as 12 percent.
In other business, the council:
O Approved extension of a Going Out of Business license to Foote Brothers Furniture through Dec. 13.
O Approved a request allowing the Beautification Council to place live Christmas tree on the City Hall lawn during December.
O Read a proclamation declaring Oct. 23-31 as Red Ribbon Week and heard from various members of the Prevention Coalition about their experiences with drug and alcohol abuse and prevention.
O Accepted a recommendation to authorize a $1,000 refund to Rebecca Vinson for court fees.
O Authorized payments totaling $167,154,60 for September accounts payable received after the year-end.
O Authorized October accounts payable of $127,116.74.
O Authorized September payrolls totaling $372,981.20.
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