Florence sales tax increase does not pass after tie vote

FLORENCE, Ala. – A sales tax increase failed to pass Tuesday night.  Members of the city council tied 3-3.  A proposed lodging tax increase of 3% also failed to pass after a tie vote.

Below is an earlier version of the story:

City leaders say they are at a fork in the road. They are faced with raising sales tax, or having to dig deeper into their dwindling reserves to keep the city operating.

Mayor Steve Holt

“It’s difficult to keep up,” stated Florence Mayor Steve Holt. “It’s time, in my opinion, that we don’t kick the can down the road any further; it has to stop.”

Mayor Holt has been in office for one year. He and several new council members are faced with deferred maintenance issues and roads which need to be paved.

The trouble which has plagued the city over the years, sales tax receipts are not keeping up with inflation.

“For city’s certainly in Alabama that’s the only option we have,” Holt explained. “Sixty-percent of our budget is from sales tax, and about twenty plus/or/minus percent from business licenses and fees. So, eighty-percent of our budget comes from those two items.”

City administrators say they typically see a yearly increase of one-and-a-half percent in sales tax revenue. Holt said that’s not enough to sustain what needs to be done.

The council is debating whether or not to increase sales tax by a full-cent, bringing up to 9.5 percent.

“It takes every penny that we have, on a $58 million budget, we have less than 1/100th of one-percent surplus,” Holt said.

According to Holt, if the council approves the increase, $9 million could be generated for the general fund each year. Giving them room to tackle services which need attention.