Sales tax, alcohol sales weighed as options
By Staff
Leada Gore, Hartselle Enquirer
Hartselle’s leaders are faced with several options in the wake of last week’s defeat of a 7.5 mill property tax that would have paid for the construction of a new high school.
One option would be a 1-cent sales tax increase. The increase would generate about $1.4 million a year, enough to finance bonds for the school improvements. All that’s required to put it in place is a majority vote of the council.
Another option would be the legalization of alcohol sales. There are no exact projections on how much that would generate. Legalizing sales would require a vote of the people and Hartselle residents have historically voted overwhelmingly against such a move.
Either option will be a political hot potato sure to be bandied about leading up to the August municipal elections.
The easier of the two options - the sales tax - would be an increase over the half-cent increase the council had pledged to adopt if the property tax passed. The combination of the two would have funded construction of a new $30 million high school and made space available at the existing facilities.
Hartselle residents currently pay 8 percent sales tax, 1 percent lower than Decatur and 1 percent higher than Morgan County.
The other option to pay for the new school is legalized alcohol sales. But with no firm data available, knowing if that would be enough to fund the project is hard to do.
Last year, the city paid Buxton, a Texas-based research firm, $63,000 to identify market gaps and provide contact information for major developers. As part of this study, the company looked at the impact of the lack of alcohol sales on the city. The study showed potential alcohol sales in a wide-ranging trade area to be some $18 million. However, this figure includes money spent on alcohol while people travel, such as when they are on vacation. The truer number may be seen on the figure Buxton provided for the amount people would spend on alcohol to be consumed at home. They put that number at $13 million, though there’s no way to know how much of that would be spent in Hartselle vs. in other legalized areas.
Perhaps a truer comparison can be made when looking at other cities that have gone wet. Athens, with a population of some 20,382, is larger than Hartselle. Voters there legalized sales in 2003 and have staved off subsequent attempts to strike down the law.
Tankersley said Athens Mayor Dan Williams provided information to him that his city takes in about $500,000 in fees and alcohol taxes. Athens’ sales tax is 8 percent, so the city receives that revenue from alcohol sales, too.
Athens’ divides money generated from alcohol sales between the city’s general fund and its school system. Published reports show the city’s sales tax collections increase from $6 million in 2003 before alcohol sales to some $7.65 million in 2006.
Hartselle voters have rejected alcohol sales several times, often by an overwhelming majority. Before the matter could be placed before voters again, a petition with 25 percent of those participating in the most-recent referendum. Last week’s referendum drew 3,149 voters to the polls; a pro-alcohol petition must contain 787 verifiable signatures before it could go before voters.
