Mobile City Council Passes Temporary One Cent Sales Tax Increase
May 4th, 2010
Mobile Mayor Sam Jones and a majority of the City Council have approved a short term funding compromise to delay any layoffs or reduction in core services, in hopes the slumping economy will rebound and give city officials a chance to further streamline city operations.The compromise, sponsored by Jones, City Councilmembers Gina Gregory, Reggie Copeland, Fred Richardson, William Carroll and Jermaine Burrell, will include a one percent sales tax that will end on September 30, 2011 (See Ordinance 34-011-2010 Below).
Though the compromise is a “stop the bleeding,” short term solution, it WILL NOT address the city’s long term funding crisis. At the end of the year when the compromised sales tax expires, city officials are projecting a $11 million deficit.
“We’ve reached a compromise that is in the best interest of our city,” Jones said. “We realize there are no perfect solutions to this unprecedented economic crisis in our country, state and city. Now is the time for us to look at what we can afford and what we cannot. This compromise represents us moving on so our city can recover without immediate layoffs and without shutting down important services that citizens expect.”
Councilmember Gregory has noted that the compromise will give city officials a chance to look inwardly at its operations, make more cuts and “do what citizens have asked us to do – be more accountable (See Resolution 60-203-2010 Below).”
Both the mayor and the Council have agreed to the following:
• A temporary one percent sales tax through fiscal year 2011. The temporary tax will generate $26.5 million dollars;
• An efficiency study to streamline city government;
• Essential travel only until the economy rebounds;
• No pay raises and promotions;
• A hiring freeze
• Working collectively to ask the Mobile County Personnel Board to amend rules and give the city more flexibility;
• Studying options to create a fee-based revenue structure for city government;
• Reducing the city’s holiday schedule.
Both Jones and Gregory admit the compromise will prevent layoffs now. “Layoffs and salary reductions may happen in the future if the economy does not rebound and the city’s sales tax revenues do not increase,” Gregory said. “But for now, we have some breathing room to look at ourselves and solve the problem.”
This temporary increase DOES NOT affect the following items:
• Food and beverages sold at restaurants;
• Lodging;
• Liquor purchases;
• Wine distribution;
• Sales of cigarettes and other tobacco products;
• Gasoline and motor fuel;
• Motor vehicle rental.