BY SARAH STEPHENS
ELMORE/AUTAUGA NEWS
Top Photo: Millbrook Mayor Al Kelley addresses council members and department heads during Tuesday night’s work session meeting. He said raising taxes is not something he and others want to do, but with current proposed legislation, it is necessary. (Photo by Sarah Stephens/EAN)
Mayor Al Kelley is having to consider something that he and former City Council President Fred Watts said they would only do if absolutely necessary – increase the sales tax.
“Fred and I always looked at our low sales tax as a benefit, saying that we would only raise it if absolutely necessary,” Millbrook Mayor Al Kelley told the EAN.
Tuesday night, the City Council had a first reading of an ordinance that would amend the current ordinance regarding sales and use taxes. A second reading will be at the next Council meeting Tuesday, June 13. It is expected the council will vote for or against the tax increase at that meeting. The meeting is held in the courtroom of the Municipal Building on Grandview Road at 6 p.m. Meetings are open to the public, and public comment is accepted prior to any vote.
This comes because of recent proposed legislation that would limit municipalities discretion on taxation authority, officials said. Looming large is House Bill 479, which is the catalyst for Millbrook to consider increasing taxes. More information on that is in this article with links, as well as additional information at the bottom of the article.
Proposed Millbrook Ordinance 23-02 would amend the current sales and use tax, raising it from 3.5 percent to 4.5 percent. This would bring Millbrook’s overall sales tax up to 9.5 percent. If passed, this would make Millbrook closer in range to other areas who already have higher sales and use taxes.
For the past 31 years, Millbrook has kept its overall sales tax at 8.5 percent, the lowest in the immediate area.
Prattville is at 9.5% (10.5% in some areas), Wetumpka is at 9%, Montgomery is at 10% and Tallassee is at 10%. The Millbrook sales tax was last raised in 1992 – 31 years ago by a prior administration.
“Our proposal is to increase Millbrook’s sales tax rate to 9.5%,” Mayor Kelley said.
Kelley said Millbrook is still in very sound financial shape. However, he sees things changing as the area continues to grow and this is bringing additional costs. He said equipment costs have risen dramatically – lawn mowers were $9,000, now the cost is $12,000; trucks were priced at $26,000, now the cost is $36,000.
“This is only a small example of how our city is being affected by inflation, as are our citizens,” Kelley said.
“Our employee starting salaries are below average. We need to raise our starting pay to hire qualified employees and provide for their long-term employment. We need more people in each department with better and newer equipment to do the job that our citizens deserve. With increased manpower, we can continue to provide the services you deserve. Unfortunately, we are losing employees because they are offered higher paying jobs elsewhere.
“We want you, the citizens of Millbrook, to have the best of every service that a city can provide. That costs money. We have a great quality of life and are in terrific financial condition, but this cannot be sustained if not properly funded,” he said.
Many of the funding streams for the City of Millbrook are controlled by State and/or County mandates. Millbrook sales tax revenue represents over 56% of the total city budget. It is the one source of income for a city that makes a tremendous difference in the availability of funds for services for citizens, equipment needs for all departments and employee retention policies.
“Our State Legislature is currently taking steps to potentially limit municipalities from controlling their own sales tax rates. This is one of several actions the Legislature is taking this year that can harm revenue for cities. If this happens, it can be catastrophic for many municipalities, including Millbrook,” Kelley said.
“An increase in our sales tax rate that is being proposed is not what we want to do, it is more of what we have to do at this time. This decision will be seriously considered by the Millbrook City Council,” Kelley said.
The Alabama League of Municipalities has been issuing Legislative Alerts concerning the proposed legislation.
From the League Of Municipalities –
HB479: Amendment to Food Tax
HB479 will be in the House Ways and Means Education Committee (W&ME) Wednesday and we expect a vote by the full House on Thursday. This legislation could have significant financial impacts for municipalities. We need everyone to reach out to their representatives today to garner support for an amendment to this bill, more information below.
To contact your House member and voice your opinion, click https://alison.legislature.state.al.us/house-leaders-members?tab=1 for contact information.
OVERVIEW OF HB479
HB479 by Rep. Danny Garrett begins reducing the state sales and use tax on food on September 1, 2023, with future rate reductions contingent upon certain growth requirements in the Education Trust Fund until the rate is 2%. The bill defines food as items on the Special Supplemental Nutrition Assistance Program (SNAP).
Additionally, HB479 would cap local sales tax on food as of September 1, 2023, and would prevent any future increases in sales tax on food. While the bill would allow for a municipality to reduce its sales tax on food, it would prevent increasing it after it is reduced. To review HB479, click https://www.legislature.state.al.us/pdf/SearchableInstruments/2023RS/HB479-int.pdf
From the League of Municipalities: “We encourage our members to contact the House W&ME Committee, as well as their delegation in the House (if not serving on the committee) to ask for an amendment to HB479, which would allow a municipality that has reduced its local food tax to increase it again, if necessary, to the amount of the current sales tax rate. In other words, this amendment would make sure that the local food tax is not capped.”
Below are House members from Autauga and Elmore counties who serve on the House Ways and Means Education Committee.
Rep. Kelvin Lawrence (Autauga County, Lowndes County, Montgomery County, Wilcox County): (334) 261-0536
Rep. Troy Stubbs (Elmore County): (334) 261-0595
Additional proposed legislation being monitored by the League of Municipalities:
SB257 by Sen. Andrew Jones and HB479 by Rep. Danny Garrett begins reducing the state sales and use tax on food on September 1, 2023, with future rate reductions contingent upon certain growth requirements in the Education Trust Fund until the rate is 2%. The bills define food as items on the Special Supplemental Nutrition Assistance Program (SNAP).
Additionally, SB257 and HB479 would fix local sales tax on food as of September 1, 2023, and would prevent any future increases in sales tax on food. While the bill would allow for a municipality to reduce its sales tax on food, it would prevent increasing it after it is reduced.
The League is monitoring this bill and sharing concerns with lawmakers on the potential impact this legislation could have on municipalities. They encourage their members to review this legislation and provide feedback of any impact it could have on their community. To review SB257, click https://www.legislature.state.al.us/pdf/SearchableInstruments/2023RS/SB257-int.pdf
To review HB479, click https://www.legislature.state.al.us/pdf/SearchableInstruments/2023RS/HB479-int.pdf
Additionally, HB250 by Rep. Danny Garrett and SB177 by Sen. Arthur Orr phases out the state sales and use tax on food defined as WIC items and caps the municipal sales tax rate on food at the current sales tax rate. To review HB250, click https://www.legislature.state.al.us/pdf/SearchableInstruments/2023RS/HB250-int.pdf
To review SB177, click https://www.legislature.state.al.us/pdf/SearchableInstruments/2023RS/SB177-int.pdf Rep. Arnold Mooney filed HB396 which is similar to SB177 and HB250 but defines food as SNAP items. To review HB396, click https://www.legislature.state.al.us/pdf/SearchableInstruments/2023RS/HB396-int.pdf
