Sales tax receipts in Brewton have remained steady, despite the changes in the economy, city officials said — and they are not expecting a need to raise taxes.
In Atmore, city officials voted last week to increase sales, gas and other taxes in the city to help offset increasing expenses and a dwindling revenue base. That rise in city taxes is an echo of a similar step taken by the City of East Brewton in late 2007.
City sales tax in East Brewton rose by a penny and gasoline taxes rose by two cents on the gallon. That increase in taxes was expected to bring in an additional $250,000 annually in revenues for the city.
At the time of the tax increase, East Brewton Mayor Terry Clark said the increase would be enough to overcome a deficit seen in the city as well as provide for future expenses.
Two and a half years later, Clark said the move was a smart one.
“This is just something we had to do and it was the right move for us to make,” Clark said. “Because of the increased revenue we have been able to maintain our staff and their benefits and we’ve been able to provide continued services like fire and police protection to our citizens.”
Clark said about 90 percent of revenue for the city comes from sales tax – a tax he said is the most fair for anyone.
“When you impose a sales tax it’s the fairest tax there is,” Clark said. “No matter who you are or how much you spend you are paying your fair share of taxes. Everyone pays the same sales tax regardless of class or spending habits.”
Increases in East Brewton raised the sales tax to 4 cents on the dollar with an expected revenue increase of about $140,000 based on gross sales receipts from area merchants at the time of the passage. Currently the 9 percent sales tax in East Brewton is divided at 4 percent for the city, 4 percent for the State of Alabama and one percent for Escambia County.
Although other municipalities in the county have increased sales and other taxes in their cities, Brewton has kept taxes steady with no plans to impose an increase.
Brewton City Clerk John Angel said neither the mayor nor council members in Brewton have made mention of a tax increase.
“Right now we are holding on and have no prospects of raising any taxes,” Angel said. “Our revenues have been flat for a while with no significant increases or drops.”
Angel said the economy has had an affect on everyone, even municipal governments.
“Right now, because of the economy, we are putting very little into our reserve accounts,” Angel said. “We have a freeze on hiring and any new projects. We also have a freeze on the purchase of any big-ticket items. We have a close eye on finances and aren’t doing anything that isn’t necessary.”
Angel said business licenses fees are currently helping to put needed funds into the city’s accounts.
“Most businesses are paying license fees right now and those funds are helping to fill in some gaps that were left by a drop in sales tax revenues,” Angel said. “It helps to keep funds available for city needs.”
Although some businesses closed during 2010, Angel said other new business will help recover losses due to the closing.
“We lost four businesses last year, but we had new ones to open,” Angel said. “We lost Kervin’s Auto Parts, Brewton Outdoors, Tanz N Treasures, and the Uptown Café. But, we now have What-A-Burger, Clayton L. Photography and Murphy Oil. Things are doing well for those new businesses and it has certainly helped to overcome the losses from the other businesses.”
Sales tax in Brewton remains at 8 percent with a 1-cent city tax. Angel said the city of Brewton shares its tax revenue with the Brewton City School system.
“One-third of our sales tax goes directly to the school system,” Angel said. “If we did increase our sales tax that would mean the school system would get an increase, too. But, that’s not something we’re even considering at this time.”
Angel said the top three revenue generators for the City of Brewton are ad valorem taxes, sales taxes and businesses license fees, respectively.
In Atmore last week, the city council voted to increase that city’s sales tax by 1 percent. Other taxes raised during the same action included the gasoline tax — which went from 2 cents to 3 cents on the dollar; a 2 percent lodging tax; and rental/lease taxes increased by 3 percent.
Atmore Mayor Howard Shell said the city didn’t impose the increases without due consideration and input from local merchants.
“We didn’t do any of this without talking to business people and other in town to get their opinions,” Shell said. “This wasn’t done with us just sitting down and making these decisions. No one likes to raise taxes. This is something we’ve been talking about for two years.”
Clark said no opposition was voiced to the City of East Brewton in anticipation of raising the sales tax, and no complaints have been voiced as a result of the tax increase.
“We didn’t get any opposition from the businesses in East Brewton,” Clark said. “The people here know that in order to keep our police department, fire department, garbage and trash departments providing services, we have to have money. That money comes from sales tax. We don’t have money coming in and inflation hits a city just like it hits businesses and individuals. Things have gone smoothly since the increase and the city is managing on our current revenues.”
Shell also said every effort was made to keep expenses of the city as low as possible.
“Prior to doing this, we made personnel adjustments,” Shell said. “We have not bought new police cars or new fire trucks. We have purchased three or four used fire trucks from other municipalities. We have cut every corner possible, but we have reached a point we felt we could not go any further.”
Atmore now has sales tax rates in line with rates seen in East Brewton and other municipalities across the state.