FAIRHOPE, Ala. — Mayor Tim Kant might be sharpening his veto pen.
If his comments this week are any indication, Kant could well veto any sales tax passed by the City Council at its next meeting.
Kant opposed a sales tax during Monday’s …
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FAIRHOPE, Ala. — Mayor Tim Kant might be sharpening his veto pen.
If his comments this week are any indication, Kant could well veto any sales tax passed by the City Council at its next meeting.
Kant opposed a sales tax during Monday’s public hearing and at Sunday’s “state of the city” address.
“If the council does move forward on a sales tax, we won’t have anything to fall back on,” Kant said as the first person to address the council from the floor during Monday’s public hearing on a 2 percent city sales tax. Kant said he has always considered a sales tax as a final option when other alternatives for raising revenue have been exhausted.
An ordinance establishing the city’s first sales tax is scheduled for a vote at the council’s April 13 meeting.
Kant exercised his first-ever veto during last summer’s struggle over pay raises for the council and mayor, as the council set the stage for later relieving the mayor of his job as superintendent of utilities. The mayor vetoed the council’s salary hike, which was quickly reversed by the council through a veto override procedure.
The vote on the sales tax and any veto override could occur without Council President Debbie Quinn’s participation. She stated during the last council meeting that she would be absent from the April 13 meeting.
Monday’s hearing at the Civic Center was attended by an audience of between 200 and 300 people, according to some estimates. That attendance was much larger than the approximately 100 people at Sunday’s “state of the city” address.
Some 33 people spoke during Monday’s public hearing, which was moderated by Councilman Rick Kingrea and preceded by a written statement read by Councilman Lonnie Mixon.
“For the past five months, as chairman of the (council) finance committee, I have closely examined the financial status of the city, and there are four areas of real concern to me,” said Mixon, noting those concerns are the city’s debt, cash flow, lack of reserve funds and financial burden on its utilities. “We realize that there are many reasons why we are in a deficit condition, and we know that it is our responsibility to correct it. The only source of income other than ad valorem taxes and utility transfers would be a sales tax. The State of Alabama Department of Revenue estimates that a 2 percent sales tax will provide Fairhope with approximately $7 million per year. By allocating 50 percent of the sales tax money to the general fund, we will overcome the cash flow deficit. We can then limit utility profit transfers to 50 percent, which will allow for growth and reserve build-up in the utility departments. The remaining 50 percent of sales tax will be allocated to the general fund reserve account.”
Mixon also said that Alabama does not allow a tax on prescription drugs. That seemed to be a response to Kant’s statement during his “state of the city” address when he said he was against any tax that would increase the financial burden of local residents who purchase medicine.
During Monday’s hearing, the majority spoke against the proposed tax, and the cheers and clapping for those speakers was much louder than for those speaking in favor of it.
Among the opponents was Karin Wilson, owner of Page and Palette bookstore.
“I’m opposed until every line item has been reduced,” said Wilson, adding she had done the same thing at her business. “I took a pay cut, and my employees took a pay cut, and they all went part-time. I no longer have any full-time employees.”
Wilson told the council members, who listened from a dais on the stage in the auditorium, that she had voted for many of them during the election last year but that, “I will not vote for you again, if you vote for a sales tax before reducing expenses.”
Many of the opponents echoed those comments, saying the city had not done enough to tighten its belt during current tough economic times, and a number of speakers called for a public referendum on the measure.
A few speakers addressed the issue of reducing salaries of city staff, and one speaker believed the council should investigate whether there is any duplication in work that city employees do.
All city employees received a 4 percent pay raise last year, but the issue of rolling back city salaries or making staff cutbacks has not been discussed during recent council and committee meetings on the city’s financial condition.
“I don’t think so,” said Mixon before Monday’s public hearing started, regarding whether the council had studied staff salaries or duplication in employee services. “If we start cutting staff, we will have to reduce services.”
Some prominent voices did speak in favor of the sale tax, including Aaron Norris, former city electric superintendent who held that job for approximately 35 years until his retirement in late 2007.
“We should have done it 10 years ago,” Norris said. “We don’t have a choice unless somebody can come up with some (other revenue sources).”