North Jefferson News, Gardendale, AL

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October 7, 2010

Sales tax passes

1-cent increase effective Jan. 1, 2011

GARDENDALE — Starting in January, sales tax in Gardendale will be 10 cents on the dollar.

On Monday, the Gardendale City Council approved a controversial ordinance that will hike sales tax in the city from 9 percent.

The council passed the tax in a 4-2 vote before a packed council chambers that mostly opposed the tax increase.

Mayor Othell Phillips polled the crowd, asking those who opposed the tax to raise their hands, as well as those who supported it. Those in opposition outnumbered supporters at least two to one.Phillips himself voted against it, along with councilman Wendell Phillips. Supporting the tax were finance committee chairman Alvin Currington and committee members Faith Harper and Peggy Tumlin, along with councilman Gary Morris.

The tax will go into effect Jan. 1, 2011, and will expire on Dec. 31, 2014. It was originally set to go into effect on Nov. 1, 2010, but the city council adopted an amendment to change the dates.

Currington said the tax is expected to generate $9.5 million in four years and is earmarked for specific projects:

• $1 million to expand the Gardendale-Martha Moore Public Library

• almost $4 million to pay off the city’s long-term debt caused by three major projects: The Gardendale Post Office, Gardendale Civic Center and the Odum Road expansion project

• the remainder, $4.6 million (if the $9.5 million prediction is correct) for economic development, including but not limited to, “recruitment of new and expanding business, the construction of municipal infrastructure in support of trade, the granting of incentives as allowed by law, the acquisition of property, and such related uses as may be approved by the City Council from time to time,” the ordinances states.

None of the proceeds of the tax will be used in the city’s operating budget.

The financial committee’s argument for needing the tax is that the city’s reserve fund is shrinking. Currington said there is $6 million in the fund, $1.5 million of which is earmarked for certain projects like road construction and police and court expenses.

He said the remaining $4.5 million would decrease to about $1 million by 2014 because the city spends more than it brings in.

Gardendale’s city accountant agrees. “If this city keeps on going like it’s been going the past two years, there will be no city of Gardendale,” said Dee Gray to the crowd Monday night. “You didn’t want a property tax. ... You want the services, you want the city, you’ve got to pay for it. There’s no money there. It’s almost gone.”

There is no property tax in Gardendale.

Those who oppose the tax, including Mayor Phillips and councilman Phillips, said the tax is a bad idea in the current economic climate. They said the city has plenty of money and the tax burden on citizens is unnecessary.

“My employment background consists of over 16 years in the financial and banking industry and my recommendation was to refinance our debt to gain more favorable rates and to extend the term. When the economy rebounds, we pay extra toward the debt to pay it off early,” Mayor Phillips said. “We are currently covering our operating budget, and the outstanding debt is the only reason reserves were used. The city of Gardendale has only approximately $5 million in debt, and for a city of our size with the services we have, that’s very good.”

Wendell Phillips said the city could always pass the tax later if it got into financial trouble.

“But we’re nowhere near in trouble,” he said. “I just don’t think it’s the right time.”

The council members who voted for the tax did not make comments.

The city council allowed citizens to stand and state their opinions during the meeting. The following are comments from residents and business owners:

• Michael Martin asked if the proposal could be put to a vote in November. “The city cannot use taxpayer money to put on a special election for a vote that can be passed by the city council,” said Mayor Phillips.

• “I think most of us don’t approve a tax increase without our say so. ... I know it’s legal, but morally it doesn’t seem right. — Louie Davis

• “You were elected to do our will. You are doing a disservice to your people.” — Misti Boackle

• “You guys are here to represent us, not yourselves.” — Lucricia Hosch

• “What are we going to do to keep employees in jobs? ... This tax is not going to take care of them at all.” — Alan Hall

• “I want to see where the money’s going to be spent. We don’t need Washington politics here in Gardendale. ... Put the money back in the hard-working people in Gardendale.” — Derek Johnson

• “How aggressively is the city going after new business in the city? ... If we’re going to rely on sales tax, we need to go after new business aggressively.” — David Richter

• “There’s no need to penalize those among us who make the least amount of money. ... We can do this as a team. We do not need to be divided.” — Russell Smith

• “The sky is not falling. ... We’ve got to be productive and creative to get businesses here. ... Businesses are teetering, waiting to see if the Christmas season will make or break them.” — Jerome Cantrell

• “Gardendale is the best city to work with in north Jefferson County. ... It’s not an easy decision. We pray for you to do what your heart is telling you to do.” — Dean Taylor

• “It’s a new day. ... I’m going to do everything I can to bring money into Gardendale. ... I’m here for this city. I’m here for this council. I hope we can all say that at the end of the night.” — Jeff Dennis


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