Council rescinds motion supporting sales tax increase
Published 7:45 pm Thursday, November 30, 2017
The Selma City Council is abandoning the idea of raising sales tax — at least in the near future.
The council had previously passed a motion approving a 1-percent sales tax increase pending a public hearing and the final approval of an ordinance.
The tax would have put Selma’s total combined state, county and local sales tax at 11 percent — the highest allowed by state law.
Only three other municipalities in Alabama — East Brewton, Falkville and York — have an 11-percent sales tax.
The average sales tax in Alabama is 9.01 percent, which is fourth highest in the country, according to the Tax Foundation.
Based on 2017 revenue projections, a 1-cent increase could generate more than $2 million in revenue.
Councilman Michael Johnson made a motion to rescind the previous motion considering the increase.
“We are going to try to see what we can do to be good stewards and try to clean up,” Johnson said. “Let’s see if we can do that first and see how much revenue we can gain from that.”
Johnson said if cuts can’t generate enough revenue to fund city services that the idea might be revisited along with other taxes.
Councilman Johnnie Leashore agreed that more revenue would eventually have to be found.
“It still does not negate the fact that we need money to operate the city,” Leashore said. “We need more funds to continue to provide quality services that our citizens so rightly deserve.”
The city council has also discussed a property tax increase, which would be harder to approve and take long to go into effect.
Any property tax increase would have to pass in the Alabama Legislature and then have to be approved by voters in Selma via a referendum.
The city’s current millage rate is 27, of which 11.8 is set aside for education.
That rate is the 12th highest of any municipality in the state, sandwiched between Birmingham, the largest city in the state, and Carrollton, which has a population of 1,019 in Pickens County.
The council discussed property tax increases of 10, 15 or 20 mills and how much money each would generate. With a 10-mill increase, Selma’s property tax rate would be third highest in the state, only behind Vestavia Hills (49.3 mills), Fairfield (40.5 mills) and Midfield (37.8 mills).
A 15- or 20-mill increase, would put Selma only behind Vestavia Hills for highest mill rate of any municipality in the state.
There is no city property tax in Valley Grande, while the rate is 8 mills in Orrville. Neighboring cities have the following millage rates: Demopolis (26 mills), Prattville (7 mills), Clanton (7 mills), Marion (6 mills) and Camden (5 mills).
A 10-mill increase would generate $1.2 million more for the city, while 15 mils would add $1.9 million and 20 mills would add $2.5 million.