City of Athens to begin collecting additional 1-cent sales tax on New Year’s Day

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ATHENS, Alabama – On New Year’s Day, businesses in the city limits of Athens will begin charging consumers an additional 1 percent sales tax, bringing the total to 9 cents on every dollar.

The controversial increase approved by members of Athens City Council in October will provide the city with the funds for long overdue maintenance, infrastructure upgrades and fleet replacement for fire and police departments, Mayor Ronnie Marks said. Those items are needed if the city hopes to stay competitive with retail recruitment, he said.

“It gives you an opportunity to plan rather than be in a reactive mode,” Marks said. “Like we’ve said before, it’s a difference between having a revenue stream to do planning or do like we’ve always done and kick (projects) down the road.”

Council members who approved the increase about a week before a new council was seated said at the time that voters would not approve an increase in property taxes to fund the much-needed improvements and equipment purchases and they felt the sales tax increase was the only solution.

Residents who opposed the increase were upset to learn a few weeks ago that the city ended its fiscal year in October with a $1.4 million surplus.

“They said, ‘Why are you doing a tax increase if you finished at $1.4 million to the good?’” Marks said.

He responded that not only does Athens want to remain in good financial condition and plan for future projects but, because it insures its employees, the city must prepare for bad years.

“We chose to be a city that is self-insured,” Marks said. “We’ve been very fortunate we haven’t had many catastrophic illnesses or difficult situations but if we had two or three bad years, there would not be a surplus.”

Marks said revenue from the sales tax increase, expected to be about $4.4 million annually, would be used for:

• Infrastructure: 30 percent. These funds would go for bridge, road, sidewalk and green space improvements.

• General fund: 30 percent. Funding would go to public safety, services and quality-of-life improvements.

• Schools: 20 percent. Money would go into a special account that would be used at the discretion of the council for projects proposed by city schools.

• General fund contingency: 20 percent. These funds would be used for debt service and emergency items.

All expenditures using revenue from the new tax must be approved by the City Council.

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