Mobile’s ongoing debate over its temporary penny sales tax hit another delay this week after Councilman Fred Richardson raised the idea of making the increase permanent, prompting council members to push the decision back another two weeks rather than vote immediately.
Richardson withdrew his motion to permanently lock in the tax after colleagues voted 6-1 to postpone any decision, meaning the city’s entire fiscal year 2015 budget, which depends on extending the tax to generate additional capital revenue, likely won’t come up for a final vote until at least the council’s next meeting later in September.
The tax in question traces back to a 2012 temporary increase that raised Mobile’s local sales tax rate from 4 percent to 5 percent, pushing the combined state, county, and city rate to 10 percent. Richardson argued the city can’t afford to let the extra revenue disappear given the scale of infrastructure needs facing Mobile. “Other than Semmes, Alabama, there is not a city anywhere that is less than 10 percent,” he said, arguing Mobile’s rate remains in line with peer cities even with the increase in place since November 2012.
“Why would we want to give up $32 million when our own engineers said we had hundreds of millions of dollars of infrastructure issues that need to be corrected?” Richardson said. “I say let the penny alone.”
Councilwoman Bess Rich cast the lone vote against delaying the decision, arguing instead that Mobile voters should have the final say on whether the tax becomes permanent through a public referendum. Council President Gina Gregory has also floated the idea of letting residents vote directly on the tax’s long-term fate rather than leaving the decision solely to the council.
The delay carries direct consequences for Mayor Sandy Stimpson’s proposed budget, which counts on extending the tax by two additional months, through Sept. 30, 2015, to generate roughly $5 million earmarked for the city’s Capital Fund. The Stimpson administration had not yet taken a position on whether the tax should be extended beyond that point, and Richardson made clear he wants any renewal to be the last word on the matter. “Don’t come back eight months later and say we need the penny,” he said. “This is it for the penny.”
Rather than voting immediately, the council opted to schedule a dedicated committee meeting to continue hashing out the tax question, alongside a broader public hearing on the overall city budget held the same week at Government Plaza. With the fiscal year beginning Oct. 1, the extended back-and-forth over the tax’s future left both the revenue question and the city’s capital spending plans in limbo heading into the final weeks before the new budget year.