“Our first goal is to pay our debts, and to help the School System at this juncture is great,” said Mayor Bill Hereford, who introduced the first reading of the ordinance two weeks ago.
Since the first reading of the ordinance to increase the city’s sales tax, there were two public hearings. Residents offered comments both for and against the 1-cent tax hike.
“We’re very grateful to the City Council for helping the School System,” Schools Superintendent Dr. Bobby Hathcock said. “We’ll be able to maintain the service that the people of Pell City have come to expect.”
The School System will receive 50 percent of the revenue generated from the new sales tax increase.
Officials say the tax increase will generate $2 million to $2.5 million annually.
The School System will receive half of the tax increase for the first four years and the city will receive the other half. After four years, the city will receive the entire revenue generated from the increase.
Hathcock said after the vote Monday night that the additional tax will allow the School System to tap into low interest rate bonds at 1.8 percent, for the renovation of Iola Roberts Elementary School.
“It’s money that won’t be available anymore,” he said.
Hathcock said the low interest rate bond money is available through the stimulus program and part of the sales tax money will be used to pay it back.
“If we don’t accept that money, we’re backing up,” he said.
Hereford said the city needs the tax increase to meet future obligations, including money to pay off a $12 million bond the city secured to fix its sewer system problems, its $50,000 a year obligation for the new St. Vincent’s St. Clair Hospital, and its obligation to purchase a required amount of water each month from the Coosa Valley Water Supply District when the new surface water treatment facility is up and running.
At Monday night’s meeting, Councilman Donnie Todd said he only received three e-mails against the tax hike, and many parents called him to express their support of the sales tax increase.
Todd, along with Councilman Donnie Guinn, said the School System should be supported by ad valorem taxes, not through a sales tax.
“This is something that needs to be addressed,” Todd said.
He said he hopes citizens do not abandon city stores or businesses because of the small tax increase.
He said when he travels, he doesn’t ask the tax rates at the places he stays and eats.
Todd also said the city needs the additional revenue to meet future obligations.
Councilman Greg Gossett, the lone council member to vote against the tax increase, said some people will shop elsewhere because of the tax increase.
“I have people drive past my place to Coal City because of a 2 cent difference,” said Gossett, who owns and operates a gas station. “To think it won’t happen with this tax increase — it will happen.”
He said there is waste in both city government and the School System that needs to be eliminated before raising taxes.
Gossett said the school board doesn’t need to spend this tax money on buildings, unless there is an emergency need.
He also said the School System was only brought in as a partner to help rally support for an otherwise unpopular sales tax increase.
“Children have been put in front of this wagon,” he said.
He also said this tax increase should be voted on by the people, not the council.
“I don’t think the six of us should be making this decision,” Gossett said.
During the two public hearings prior to Monday night’s vote, opponents of the tax hike said the new tax increase will send shoppers elsewhere because the city’s sales tax is already too high. They said sales tax revenues will actually go down, not up, with the tax increase, and sales tax is not a dependable source of revenue for schools.
Opponents of the tax say with the economic downturn and local businesses closing their doors in recent months, this is no time to raise taxes. The tax increase, they say, will hit the poorest residents at the worst time. Some people also questioned why city officials say they are in dire need of additional revenue when those same city officials are still trying to buy expensive commercial property, the Avondale Mills property.
Proponents of the sales tax increase say the small increase would not break anyone and would help keep the city and School System moving forward. Proponents of the tax say they did not want to see the School System to go backwards, and it is the School System that attracts new residents, industries and businesses to Pell City.
Proponents of the tax say the sales tax hike is an investment in children, who are the future of the city. They say without additional funding, the largest city employer, the School System, could be forced to lay off workers. Others say school programs could be cut without the city’s aide and the sales tax increase is in line with other local municipalities.
Hereford said the new tax hike will go into effect in 60 days.
More coverage of the council meeting will appear in Wednesday’s edition of The Daily Home.
Councilman Todd said that he only had three people contact him oppaosing this tax and many more for the tax, Aparently, he based his vote on what his constituents said. HOLD ON... many people voiced their opposition to the water takeover but he did not listen to them!!. This reeks of corruption.
I am not a fan of tax increases but I was encouraged to read that the school system will use part of the funds to renovate Iola Roberts Elementary.
There are three schools in the Pell City System that are eyesores: Iola Roberts, Duran North, and Duran South (the high school isn't great either). Surrounding communities (and the county) have built new (or renovated) schools to make them more inviting places. A community's schools and cultural offerings (library, parks, etc.) are a key impression made on visitors and those looking to relocate. I have heard people from other communities comment on the appearance of Iola Roberts when they pass it. They were surprised the community would "allow such an old building" for its children. This does not send a warm welcome for prospective families looking to locate here. The appearance and quality of our schools speaks volumes about the community's value it places on education (and so does the public library which is understaffed, inadequately furnished, and about three times too small for a town our size).
That being said, the mayor and the superintendant of education need to address these issues. They are important for the future educational needs and growth of this community. They say they are going to use some of this new tax money for these purposes. As tax payers, let's hold them accountable and see to it that they keep their word. They've asked for the money, they've voted in the money, and now let's see some results.