KIMBERLY — The city of Kimberly will join most of its neighbors in boosting its sales tax rate to four percent.
The amendment to the city tax ordinance was given its first reading at the city council’s meeting Tuesday night. It will be voted on at the March 25 regular session.
Mayor Bob Ellerbrock said that the hike brings the overall rate to 10 percent, which is in line with Gardendale, Fultondale and — as of last month — Warrior. Moreover, it helps give the city some badly needed revenues, after city employees had across-the-board 20 percent reductions in hours or salaries.
“We’ve cut our expense as low as we can. We have negotiated some bills down that will take effect next year, but that won’t help for a while,” Ellerbrock said. “Plus we have had an increase in our fire hydrant charges that we just found out about.”
City Clerk Sandy Waid said the increased rate should bring in an additional $1,800 to $2,500 per month, figuring on historical data.
“It [the increase] is certainly going to help out. We’re trying to get used to not having the growth we had before,” Ellerbrock said. “The housing boom we had in 2008 doesn’t exist anymore. We’re adjusting our personnel and budget accordingly so that we don’t have to be in the hole.”
The tax increase also applies to goods that are ordered from businesses outside the city but delivered to Kimberly residences. That collection is handled by RDS, the company which collects sales taxes from businesses for nearly all counties and municipalities in Alabama, Ellerbrock said. (It theoretically applies to merchandise ordered from out-of-state merchants as well, but there is no mechanism in place to collect taxes from those firms, just an honor-system arrangement with customers that it rarely followed — a point of contention against online merchants such as Amazon.com by local merchants and governments across the country.)
The council also passed a resolution expressing its opposition to a bill in the Alabama Legislature that would prevent municipalities from charging business license fees on a per-unit basis for rental properties.
“This isn’t a huge deal for Kimberly, but the league [the Alabama League of Municipalities] is against it. We feel like we should be able to make those decisions on our own, not have them handed down from the state,” Ellerbrock said.
The bill would grandfather in such taxes that were already in effect before January 1. Kimberly has a percentage tax on rentals in place.
Ellerbrock also repeated a call for more volunteer firefighters, which the city’s department has needed for some time.