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Wednesday, July 15, 2015

Jackson County Commission 1% Sales Tax Issue, Interview with Chairperson Matthew Hodges on July 14, 2015

Jackson County Courthouse South side. (photo by G. Morgan)

The question is asked and answers explored - What will happen if the 1% sales tax for Jackson County is not passed by the citizens on August 18, 2015. A down to earth discussion about curtailment of services in the video interview below. There are no free rides, services cost money. If passed by the voters on August 18, 2015 the sales tax for Scottsboro and other municipalities will be 10%. 

(Click on image to expand view. Records request result.)
Total General Fund Income - $7 million dollars; total expenditures budgeted $7.4 million.

(Click on image for an expanded view, map supplied by Scottsboro Mayor Melton Potter.)


Update 12:30PM July 15, 2015- SCOTTSBORO MAYOR Melton Potter's comments and questions below regarding the county's proposed 1% tax increase. Mayor Potter had provided the discussion notes previously;  however, the notes were in draft form and I do not publish DRAFTS of public officials policy statements.

July 12, 2015, final version on July 14, 2015

1. Believe the county is experiencing financial difficulties and I know this commission is trying to correct mistakes from the past

2. Understand trying to ways to increase revenue

3. I wish the commission would have met with those cities to share ideas of ways to make the tax be helpful rather than harmful to our revenue.

4. In my opinion property tax is a more fair way to raise taxes. The nicer the house and more property the more you pay in taxes. Renters, those is government housing do not have to pay it.  (ADOR “There are two reasons for your property taxes to increase:  (1) a tax rate (millage) increase, or (2) an increase in the appraised value of the property.  The first reason, a tax rate increase, would have to come from a vote of the citizens or by the taxing authority (County Commission) to increase (or decrease) the millage rate. 

5. I  believe you are looking to make your budget whole rather than how it will affect the municipalities

6. Passing this tax is detrimental to the municipalities

7. Scottsboro, Bridgeport, Stevenson are the 3 largest who currently have 9% tax (8 Cities total)

8. Dutton, Hollywood, Pisgah, Section, and Woodville also have 9% sales tax (Dollar General, grocery stores, Pharmacy’s etc.)

9. Passing this tax will move all these cities to 10% takes us to a whole different level

10. It will hurt the sales tax collections in these cities even though Mr. Hodges doesn’t think so.

11. If we suffer lower tax collections we adjust our spending. In the 2008-09 recession our sales tax collections dropped 6% 

12. Our TVA ILOT money has also decreased significantly ($253,000) since 2010

13. We know how to manage our money in difficult times.  If this tax passes and when it hurts our revenue we will continue to provide our services without cutting them

14. There are 460 municipalities in Alabama and ONLY 82 cities or 17% of them have 10% sales tax

15. No of those cities are within 75 miles of Jackson County

16. The nearest to our area is Calhoun County Piedmont, Jacksonville, Oxford, Anniston

17. Everyone around us has 9% (Guntersville and Marshall County municipalities, Huntsville, Gurley, Rainsville, Decatur, Cullman) except Fort Payne who has 8%. 3% goes to FP City 

18. The people will have a choice of where to spend their money and spend it without driving too far

19. People in Woodville can go to Gurley (9%); folks on Sand Mountain can go to Rainsville (9%) or go to Fort Payne (8%).

20. South Pittsburg, and Jasper,  and Chattanooga 9.75 and 9.25

21. There will be leakage to the areas around us costing the municipalities revenue we are now getting

22. Scottsboro is taking the risk of losing money while the County puts $3.3 million in bank from new taxes

23. Based on last year’s sales tax receipts from Scottsboro, Bridgeport, and Stevenson an additional 1 cent sales tax would earn $3.6 million (3,536,033) Scottsboro (2,805,618), Bridgeport (268,869), and Stevenson (461,546).

24. That number could reach as much as $4 million per year when you add the other 9 municipalities sales tax receipts into it

25. The commission has stated the money would go to fund volunteer fire departments, school resource officers, and economic development ($900,000)

26. $1.5 million to Public Works Department, and $900,000 to County General Fund

27. How much do you let the Econ Dev fund grow to before you move that money elsewhere?  (10 years it will grow to $3 million)

28. I am concerned about future commissions and how they might spend the money

29. I do not see anywhere that you are giving money back to Scottsboro where most of the tax will be collected.

30. My fire department needs more funding, I could use more school resources officers, and I certainly need more paving.

31. Adding one cent to the sales tax collected in Scottsboro based on last year’s numbers would create over $2.8 million.  Or 85% of the money you estimated the new tax would create would be raised here in Scottsboro.

32. I realize it is not all Scottsboro residents who pay this tax it is folks from the county, tourists, and those who pass through town. THIS IS TRUE OF ALL SALES TAX COLLECTED IN THE COUNTY.

33. 85% raised in the city limits of Scottsboro but yet you have not directly stated any projects you will do in Scottsboro

34. Scottsboro also generates 38% of the property tax created in the entire county.

35. The population of Scottsboro is 28% of Jackson County. Since we are the main economic engine of the county I would like to see 28% of the new tax money generated given to Scottsboro. 

36. 28% of $3.3 million is $924,000.  You allocate that to us and WE can pave roads, additional school resource officers, and equip our fire fighters. Still leaves you with $2,376,000

37. Let’s just say you want to proportionately give to other municipalities 

Bridgeport 5% of population ($165,000), Stevenson 3% of population ($99,000), other 10 municipalities 1% each ($33,000 times 10=$330,000). THIS WOULD ALLOW MUNCIPALITIES TO SUPPLEMENT THEIR OWN FIRE DEPARTMENTS AS THEY SEE FIT, AND STILL leave $1,782,000 in new county money, WHICH IS 440% MORE THAN YOUR SHORTFALL. 

38. Is it worth the risk of hurting your municipalities to raise $3.3 million when the deficit is $330,000? WHY RAISE $3.3 MILLION FOR A $330,000 DEFICIT? 

39. Mr. Hodges that sales tax is a growth tax and he is correct.  Why not just add a ½ cent sales tax and collect $1.6 million per year and let the tax grow at 3 to 4% per year Scottsboro’s tax has grown between 3 and 4% each year over the last 4 years

40. I took an oath to do what is best and to look out for our citizens in Scottsboro And seeing us stand to lose sales tax revenue when the rate goes to 10% and while the County Commission puts $3.3 million in the bank is not in our best interest

41. We ask our people to shop local all the time, and now we are saying shop local and pay the highest sales tax in North Alabama.

42. Again it is my job to express my concerns and you have heard them tonight for the first time.

43. It is up to everyone in this county to go vote and vote your convictions no matter what they are.


Library—County appropriates $11,500/year last 2 years have been $5,000 and $3,000
City of Scottsboro appropriates $135,000/year

Ways we have helped the County:
1. By state law it is the counties responsibility to provide an animal shelter. Partnered 50-50 in building animal shelter and also share in the monthly expenses.  We have 3 full-time people and the county provides 1.  

2. In the last 5 years the animal shelter has taken in approximately 6500 dogs with 4500  (69%) of those being dogs from the county

3. Saved the county over $100,000 in the last 5 years by not going up on the landfill rates when the contract allowed increases tied to the consumer price index. In fact the contract expired in 2010

4. Whenever the county builds on county property in the city limits there are no building permit fees charged. (Hospital and Nursing Home, County Park, County bus garage, etc.)

5. Scottsboro Fire Department just donated equipment to the volunteer fire departments

QUESTIONS FOR MR. HODGES ( G. Morgan's comments in parenthesis().)

1. By law are you required to adopt a balance budget?  (By law all government entities are supposed to have a balanced budget in Alabama.)  
2. How much have the counties ILOT decreased in the last 3 years?
3. How will the recent $600 million industrial announcement affect the county sales tax that goes to the school systems? Estimated increase per year? (Red Herring - School Tax and County General Fund are 2 different issues with 2 different fund sites which cannot be intermingled.)
4. How much is the special election going to cost and how will it be paid for when you already have a deficit? Was is already in the budget or has the commission amended the budget to pay for it? ($80K)
5. You have stated that the tax will cost $63 per person per year.  How did you arrive at that number?
6. How much will an additional 9 mill tax add to the property tax of a $100,000 house? (The answer would be $900.00.)


Anonymous said...

6. How much will an additional 9 mill tax add to the property tax of a $100,000 house? (The answer would be $900.00.)

Incorrect. A 9 mill tax increase on a $100,000 house would be $90 not $900.

$100,000 x 10% = $10,000 x .009 = $90

Garry said...

Applied to taxes, that means 1 mill is equivalent to $1 in taxes per $1,000 in taxable value. If your property has a taxable value of $100,000, and you’re assessed a 1 mill tax rate, you’ll pay $100 in taxes. Thus, a 9mill rate would be $900.http://flaglerlive.com/8527/definition-origin-millage-mill/ also https://www.da.ks.gov/ar/muniserv/To_Compute_the-Value_of_One_Mill.pdf

Anonymous said...

Your math is correct but you are forgetting about assessed value. In Alabama you pay either a 10% assessment rate or a 20% assessment rate depending on if it's owner occupied or rental. That is why the above comment has $100,000 house value x the 10% assessment rate for owner occupied to get the $10,000 assessed value which is what you use to multiply by the millage rate do find your tax amount.

Anonymous said...

A $100,000 assessed value house would have an appraised value of $1,000,000.

Garry said...

Say what? If a property has an assessed value of $100K its appraised value is $1million dollars - horse crap. Of course you are anonymous, next thing you will be saying, you are an anonymous expert. Where do you get your information, post a link.

Anonymous said...

For example, an owner occupied residence valued at $100,000.00 would have an assessed value of 10% ($10,000.00). Multiply the assessed value ($10,000.00) by the appropriate millage rate (32 mills) to determine taxes owed ($10,000.00 X .032 = $320.00). This is before any exemptions have been applied.



Garry said...

Thanks for the link.