Proposal to Convert from Gross Receipts Tax to True Sales Tax Fails

Jun 3rd, 2003

Proposal to Convert from Gross Receipts Tax to True Sales Tax Fails: The City's garbage collection service will not change.

Mobile's garbage collection service will stay the same-at least for now. The Administration's plan to change to an automated service failed when three council members abstained from voting on a proposal to convert the city's Gross Receipts Tax to a true Sales Tax. That killed the change in garbage service as well, since the two issues were tied together.

According to Mayor Mike Dow, the two were tied together because converting from the Gross Receipts Tax to a Sales Tax would cost the city about $3-million dollars, and the change in garbage would've resulted in a savings of $1.4-million dollars. Even though the conversion is something the city's business community has backed, and council members say they support, Mayor Dow says the city can't afford the tax conversion without finding replacement revenues.

The Mayor's automated garbage program proposal provides for a two year phase in period, purchasing 18 new trucks , going from twice per week pick-up to once per week pick-up, and eliminating 72 positions in the Public Works Division. The Mayor calls this program the "Right Thing to Do, it's high tech, it's forward thinking, it's efficient and it will save the city money." But, some Council members were not satisfied that once a week pick-up was enough. They also questioned whether phasing in the program over two years would be enough time to work out all the kinks.

If it doesn't resurface before, Mayor Dow says he'll include the tax conversion and automated garbage proposal in his Budget, which he will present to the Council in August.