City leaders struggle to explain dwindling sales tax revenues

Published 7:48 pm Wednesday, May 14, 2014

Though March 2014 included the area’s largest annual tourism event, Selma’s sales tax revenues continued a steady decline in the latest city report.

Tax returns for March were greater than February, but came up nearly $16,000 less than March 2013.

Thousands of people flock to Selma annually for the anniversary of Bloody Sunday and celebration of the Bridge Crossing Jubilee, but Ward 7 City Councilwoman Bennie Ruth Crenshaw said visitors may not spend extended amounts of time in Selma.

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“We have got to realize that a lot of people don’t stay in the city for the entire weekend,” Crenshaw said. “We don’t have 10,000 people staying in the city. In fact, I don’t think we even have 10,000 hotel rooms.”

Council members proposed several ideas for why the decrease occurred during Tuesday’s meeting. Ward 4 Councilwoman Angela Benjamin and Ward 1 Councilman Cecil Williamson both cited dishonest businesses as one potential reason.

Benjamin said she has asked for a receipt on several occasions after businesses failed to record the transaction in computers.

The decrease isn’t an isolated instance of a decrease, as city government is more than $134,000 short in sales taxes for the 2013-2014 fiscal year.

“We just can’t seem to get over the hurdle,” Selma Mayor George Evans said.

Each month, Selma city government receives about $800,000 in sales tax revenue, but over the previous two years, returns have steadily decreased, according to city documents.

Ward 1 Councilman Cecil Williamson said the decrease poses a threat to city government because sales tax income makes up the 62 percent of the city’s revenue.

“[The decrease] is getting worse and worse, and pretty soon it is going to affect the services we offer,” Williamson said. “If this is really our financial situation and everybody is honestly reporting then we are facing some dire financial consequences in the next six to twelve months.”

In late 2013, the city switched its tax collection entity from Revenue Discovery Systems to the Alabama Department of Revenue to increase revenue. At the time of the switch, Evans said the city was owed nearly $500,000 from a number of local businesses.

Williamson said the decrease is puzzling when considering other forms of city taxation. For instance, in the 2014 fiscal year, the city’s tobacco tax has increased by $31,217.79 over 2013, according to city documents. Williamson said the increase began shortly after the council voted to place stamps on all tobacco cartons.

“We have seen a significant increase since placing the stamps on cigarettes,” Williamson said. It’s important we find out what is really going on.”