Business leaders cautious about new tax

By Mike Odom
Staff Writer
Posted 5/15/09

FAIRHOPE, Ala. — Some local business leaders have been unwilling to comment or are guarded in their remarks about the adoption this week of the first municipal sales tax in the city’s 101-year history.

“Of course, we’re not happy with it, …

This item is available in full to subscribers.

Subscribe to continue reading. Already a subscriber? Sign in

Local reporters keeping you informed across the Alabama Gulf Coast.

You can cancel anytime.
 

Please log in to continue

Log in

Business leaders cautious about new tax

Posted

FAIRHOPE, Ala. — Some local business leaders have been unwilling to comment or are guarded in their remarks about the adoption this week of the first municipal sales tax in the city’s 101-year history.

“Of course, we’re not happy with it, but none of the businesses are really speaking out about this,” said Karin Wilson, owner of Page and Palette Bookstore. “I’m doing it for them.”

The Eastern Shore Chamber of Commerce did not take an official position on the issue, said Darrelyn Bender, the group’s president.

On Monday, the City Council overruled Mayor Tim Kant’s veto of the 2-cent municipal sales tax.

Last week, Kant vetoed the tax adopted by the council in a 3-2 vote on April 7. Council President Debbie Quinn voted against the tax at the time, but in a surprise move Monday gave the needed vote to three other council members to override the mayor’s veto.

“No matter how much we cut the budget, we’re not going to get where we need to be,” Quinn said at the Monday council meeting before the override vote was taken. “So I feel it is time for a sales tax.”

Wilson, who spoke against the sales tax proposal at a recent public meeting, said while she is disappointed the tax was approved, she is not sure that it will have that much effect on local businesses.

“I don’t know that it will have any real impact locally though,” she said. “A lot of people I’ve talked with didn’t even know we didn’t have a city sales tax.”

During a work session prior to Monday’s council meeting, Kant presented the council with a list of $1.5 million in proposed budget cuts, which is the amount some council members have said the city will face in deficit by the end of this fiscal year.

Councilman Lonnie Mixon, who chair’s the council finance committee, said that Kant’s proposed cuts were “smoke and mirrors” and did not recommend the kind of action that would be needed to avoid borrowing money this summer to offset the anticipated cash shortfall of more than a million dollars.

“I think the council should have given the mayor an opportunity to do everything he could to implement his plans to cut the budget,” Wilson said.

“Now that they voted it in, there will be no serious efforts by the council to cut the budget, and there should be. There are many things that can be done. I’m not opposed in theory to a 2-cent tax. I’m opposed to them doing it without doing everything they can to cut the budget first.”

The sales tax ordinance becomes effective June 1, but it will take two to three months at most to implement it and for the state to start collecting it, said City Clerk Lisa Hanks.

Estimates of how much the city sales tax will raise annually have varied between $4 million and $7.5 million.

The new ordinance requires that half the fund be put in a reserve account with restrictions on its use, and the other half in the general fund.

Pete Blohme, past president of the Downtown Fairhope Business Association, took a cautiously optimistic perspective on the issue.

“All I can say is we hope some good comes from it,” said Blohme, owner and chef at Panini Pete’s Bakeshoppe and Café, “I hope that the revenue is spent wisely and just doesn’t end up in the general fund.”

Jim Wilmoth, the association’s new president, who took office earlier this year, could not be reached for comment.

“I do think it now puts the ball in the council’s court to show how this money will be spent and what the new budget will look like,” Wilson said. “That’s what the public expects.”