Tax hike raises questions
Athens, Limestone officials seek answers before referendum
By Holly Hollman
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ATHENS — A proposed 1-cent sales tax hike is generating more questions than any TV game show.
Can the city of Athens get a share? Will Athens impose its own sales tax? How will Athens City Schools spend its share?
Those are just a few.
On Monday, Limestone Superintendent Barry Carroll held a meeting with the media to answer questions about the tax.
Carroll and the Limestone County Board of Education asked the County Commission to approve a countywide referendum on raising the sales tax by 1 cent.
The commission approved that a week ago.
The tentative referendum date is Aug. 7.
If voters approve, the sales tax in Athens would rise to 9 cents on the dollar. In the county it would rise to 7 cents.
So, take a look at question No. 1.
Athens Mayor Dan Williams publicly criticized the County Commission for not waiting to give its approval until there could be discussions about giving Athens' general fund a cut.
The referendum's intent is for revenue from the hike to go to schools. Carroll said the county would split the tax with Athens City Schools based on enrollment, as it already does a portion of the current sales tax.
That split now is 75 percent to the county and 25 percent to the city.
Williams said he cannot support the increase if the city's general fund doesn't get a share. He said the city will face typical growth and growth related to BRAC just like the school systems.
BRAC is the federal Base Realignment and Closure process that's moving military jobs to Redstone Arsenal.
Commission Chairman David Seibert said all of the county's sales tax goes to schools. He said changing the allocation would require changes not only in county policy but in state law.
Seibert said the Limestone school board will send a resolution to the legislative legal service in Montgomery to draft a referendum to place on the ballot. The commission would not approve the referendum's language.
Carroll said the referendum will specify that the tax is for 10 years unless renewed by a vote and that it would go only to the two school systems based on enrollment. Collection would begin either Oct. 1, the start of the fiscal year, or Jan. 1, the start of the calendar year.
At the Athens City Council meeting Monday night, Councilman Ronnie Marks said he wants to introduce a resolution in two weeks stating that the city should have a share, even though he knows that won't change the county's mind.
Elkmont teacher Adam Wicker asked the council to support the 1-cent increase because the schools need it to be on a level those moving here expect.
"We'll be getting high tech families who can encourage the high end retail you want and help your tax revenue," Wicker said.
"But what streets will they drive on?" Councilman Johnny Crutcher asked. "We need money too."
As to question No. 2, the mayor told The Daily a week ago that he has talked to the council about considering its own sales tax hike before the referendum vote in August to protect the general fund. On Monday, he said the city has no plan to raise taxes, but if the council approved an increase, he wouldn't necessarily veto it.
The council can increase the city's sales tax without voter approval.
The issue for the city, Council President Harold Wales said, is that if voters approve the referendum and sales tax goes to 9 cents in Athens, the council won't be able to look at sales tax as a revenue source. That's because no one would want to go to 10 cents.
"No, there is not a plan to raise taxes, but we have talked about it as a possibility," Wales said. "Within the next two weeks, we'll be having a work session to discuss our needs and how to fund it, and if that involves raising sales tax, then so be it."
Crutcher said he would support raising the tax a half cent for capital needs, such as roads.
Marks said he would support keeping all the alcohol revenue if the referendum passes and the city schools gets 25 percent of the hike. Currently, the city splits its alcohol revenue 50-50 with the city school system.
The city school system has not pushed the 1-cent increase. The county system put it in motion to fund a $50 million bond issue for capital improvements such as new elementary schools, building new gyms, buying land for expansion and renovating cafeterias.
Carroll said the county would spend its share, estimated to be $5 million the first year, only on those capital improvements. Carroll said he has no control over how the city would spend its portion.
Athens Superintendent Orman Bridges Jr. said in a phone interview that the city also would use its share, estimated to be $1.4 million the first year, on capital needs. The city's five-year capital plan includes elementary school renovations, classroom additions and a three-phase, $5 million athletic complex for Athens High.
Athens resident Quentin Anderson and Williams suggested the county look at increasing the tax equally, so that the county goes up to 8 cents or both go up to 9 cents. Anderson said that Athens could otherwise lose shoppers to the county or other municipalities.
Williams had said most of the revenue would come from city businesses, about $4 million, but Carroll said county people shop in Athens and pay that tax.
Carroll added that he's not responsible for the city's general fund but for the county's children. The system has more than 30 portables, Carroll said, and will have to add more without additions and new schools. The system is $27.8 million in debt, partially because of building Creekside and Cedar Hill elementaries, he said.
"I don't want to get down the road and people say, 'Why didn't they do anything?' " Carroll said. "I knew I would get criticized, but I'm tough skinned. I can take it. We're doing this for the kids. If he gets voted down, we'll live with what we got, but it won't be good."
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