Thoughts on tax proposal

Considered and reconsidered...

This article contains initial reactions to the Blount County Commission’s 1-cent sales tax increase proposal, moderated perhaps by the passage of time since it was introduced by way of commission resolution on Dec. 14. Points of view include proponents – Commission Chairman Chris Green and District 3 Commissioner Dean Calvert (who crafted the tax proposal), both of whom voted in favor of the resolution – and opponents – District 1 Commissioner Allen Armstrong, who voted against it. Other opponents whose views are given include Chevrolet dealership owner Terry Sligh and Ford dealership owner Jim Sumpter.

Commission Chairman Chris Green

Q. How do you view the proposed tax proposal from the standpoint of the welfare of the county?

(Ed. – The proposal as passed would raise about $3 million in new taxes. Half would go to roads; 1/3 would go to the two county educational systems, split 85/15 on the basis of student enrollment; 17 percent would be split among 13 county municipalities, based on population; $50,000 annually would be split among the county’s volunteer fire and rescue departments.) A. It’s a beginning – like the old rhetorical question “How do you eat an elephant?” (Ed. – The “elephant” is the county’s mounting road maintenance problems.) And the answer is “one bite at a time.” (Ed. – ATRIP was the first bite. This tax proposal is the second. Officials elected in 2020 and 2022 will be responsible for taking the third bite.)

The perspective I hope citizens take is that it’s an opportunity to make an additional investment in their community, if they so wish. If we, as their elected leaders, don’t provide options to them to consider, then we’re not doing the jobs they sent us here to do. If they choose not to make the additional investment, then we in county government will continue in good faith to do the absolute best we can with what we’ve got to work with.

It’s not a large increase, but it will help us help the whole county and its important institutions – county infrastructure, education, municipalities, and volunteer fire and rescue departments.

I’d ask people not to jump to conclusions before we’ve had a chance to explain the needs and benefits that will be addressed by the increase. We’ll be available in the coming months to address groups and meetings around the county to provide that information and answer questions so people can make an informed voting decision.

Q. What kind of feedback have you gotten so far from the public?

A. I’ve been out and around in the county talking some to people, and I’m feeling good about the feedback. There hasn’t been a lot of negativity. It’s been more of a measured response. No one’s delighted at the prospect of more taxes, but there seems to be some understanding that we need to take a step in this direction.

Q. How would you respond to the criticism that the tax package is too small to make a significant impact on the deteriorated roads backlog?

A. We realize that maintaining county roads is a much larger problem than what we’re asking, but we realize the challenges our people face managing their own household budgets are important, too. We feel this response to road problems is reasonable and balanced when those considerations are taken into account.

Q. How do you respond to the criticism that all proceeds should go to roads, and not be diluted by having half the proceeds divided among other entities?

A. The county commission is the governing body for all the county, and as such, bears the responsibility for helping improve the overall community. We know these other institutions – education, municipalities, fire departments – face great challenges as well in meeting growing needs without growing means. I don’t mind adding that, realistically, to get everyone to support the plan, it needs to have a broad base of people who benefit from it. It represents a rising tide that will lift everyone’s boats. Improvements in those areas will benefit everyone.

Q. How do you respond to the criticism that the tax proposal doesn’t address what is arguably the hardest aspect of the road problem – the seriously deteriorated state of local “pull-up” roads and the lack of a specific revenue stream dedicated to their maintenance?

A. First, that’s a legitimate criticism. However, as we take the initiative to upgrade our most heavily-travelled roads, we are serving the largest number of people who are using those roads. At the same time we relieve the pressure of frequent repairs on those roads and free up funds for the commissioners to address those local roads from annual district budgets. (Ed. – See following interview for examples.) So, there will be more money available to spend on local roads, due to relieving the budget of some of the maintenance burden on the major arteries targeted by the tax proposal.

Q. It’s been said the tax proceeds from the automotive sales portion of the sales tax – an amount estimated in the $300,000-$330,000 range annually – would be directed to the general fund. How important is that to the general fund and what does it support?

A. The general fund, among other things, funds the costs of employment for county employees and law enforcement. It’s an increasing struggle every year because of increases in those costs, particularly such things as health insurance, for example. This would help us catch up with the curve on those costs and give us relief for a few years to come.

Q. Why should a responsible taxpayer support this tax increase? Take your best shot.

A. Our future welfare in Blount County depends on economic development, and we’re told repeatedly by experts that economic development depends heavily on two factors: providing a quality education to children and having the best, well-maintained infrastructure that we can manage. As we work to bring businesses and industry to the county, we must take care of the public property and infrastructure that belongs to all of us. As we improve over time, we actually may save more than we spend when you take the long-term view. For example, think of the savings in repair of personal vehicles we will realize as our deteriorated roads are brought up to better standards. It’s in this area of economic development throughout the county that the saying about the rising tide lifting all boats applies to the greatest extent, and to the greatest number of people.

District 3 Commissioner
Dean Calvert

Q. Over the past year you’ve changed from someone who couldn’t even make himself say the word “taxes” to a person who has taken the politically courageous and perhaps fatal step of proposing the first tax proposal to address broad county needs in the last 24 years. What brought about that change?

A. When I first started in office, I thought I could make up for the shortage of money by better organization and management. I’ve realized that no matter how well you organize and manage, it won’t be enough to solve our problems of inadequate revenue. I’ve always lived in Blount County and I always will. It took me 49 years to make my good name, and I want to keep it after this job and as long as I live. I could undo all of that even in my own mind if I don’t do the best I’m capable for the whole county. The county’s got to have more resources. I’m trying to help provide it. If I don’t do it, who will?

Q. Do you feel this is absolutely necessary, and why?

A. Absolutely. Without this plan, within five years our roads will completely come apart. You think it’s bad now, it’ll be a nightmare then. Deterioration will get to the point that we’ll never catch up. We’re almost there now. I’m concerned about education, too. If we don’t capture more revenue for education, they can’t continue to meet all the needs that are facing them. Same for the fire and rescue departments. They do the best job with the least money of any county agencies and organization I know of. But they can’t keep it up without more to work with.

Q. What kind of feedback have you gotten over the last month since you’ve made this plan your own?

A. People don’t want new taxes, but they know the roads are in dire need. I hope that means they’ll vote for this proposal when the time comes. Having the money earmarked for specific roads should help them make that decision.

Q. You made the comment a couple of meetings ago that your connection with this proposal could get you “whupped” at the polls. Any further comment on that?

A. If I can’t educate people about the needs in their community and how this plan will help meet them – what kind of bang they’ll get for their buck – I imagine they’ll turn against me.

Q. So, will you run for re-election in 2018?

A. Yes. I want to see this through, and it’ll take longer than my current term. I absolutely believe in this. I poured my heart and soul into it and spent many midnight hours working the numbers. Citizens of Blount County are our responsibility as commissioners – their travel, their education, their safety. We must come up with solutions to their needs. At the very least, we must take a stand and bring them a plan to vote on and decide on. We can’t just sit here and do nothing. So, yes, I want to see it through.

Q. How do you deal with the criticism the proposal’s not big enough to solve the roads problem?

A. It’s not big enough. But when I got married, I didn’t tell my wife I‘d build her a mansion. I told her I’d provide for her, give her a place to sleep, and keep her safe. This plan is a stepping stone, not a mansion, but it’s a start, and a good start to meet many county needs. The next steps will have to be taken by another administration after this one.

Q. How do you deal with the criticism that the plan does not contain a provision to address local roads other than major arteries?

A. I will have spent more than $230,000 this year and next year on routine maintenance and patching of roads that are included for paving by this tax plan. Once they’re paved, we can take them out of the routine maintenance cycle for a few years, and the money we won’t have to spend on them will be available for local roads.

District 1 Commissioner
Allen Armstrong

Q. As badly as the county road program is underfunded, why did you vote against a tax proposal that would have given you a new source of recurring revenue?

A. Nobody asked us to raise taxes. No individual, no board of education member, no municipality. You’ve sat through these work sessions, same as we have. Have you heard anyone come to the commission and say ‘we need more money – why don’t y’all pass a tax?’ (Ed. – Actually, one individual did recently suggest the commission pursue a tax twice or three times the size of the one it proposed – Kris Murphy, a resident of West Blount county.) Why hand out money to people who aren’t asking? My phone hasn’t been burning up with people wanting us to pass a tax and fix the roads, either.

This proposal started out as a road plan. But it’s not a good road plan. They started talking about a sales tax. I looked at it, but it got so watered down – so many people with a claim on the little bit of soup in the pot, that there wasn’t enough left to fix what we’ve got. It only addresses 6 percent of our roads. And there was no community input.

Another thing is that at least one of our state representatives has asked that nothing be done by the county because there’s going to be a state gas tax proposed this year in the Legislature. If it passed, there could be a 5- to 12-cent additional state tax imposed on gasoline, and the people won’t get to vote on that. So if this local tax comes in on top of that, what do you think is going to happen? They’re already going to be mad when they go to the polls and they’ll kill it.

Also, it’s handcuffing the towns, because if the county levies a tax increase, what chance would the towns have of passing an increase on their own, even though they would get a lot more out of it than what they’re allotted in the county proposal? It handcuffs the county, too. In case of some emergency where we’d need to float a bond issue, we couldn’t go back for another increase to support it. We’d already be at 10 percent. Nobody’s going to go above that. The towns and the school systems aren’t really getting enough out of this tax proposal to do them any good, but it cuts them off from the possibility of going it on their own.

Q. Do you have a better plan than the one on the table, and if so could you describe it?

A. First we gotta get rid of waste. There’s lots of waste in the county budget. We’ve got to cut waste. When we get really efficient, we could go to the people and say,“Here’s a list of road projects we’re gonna do if you give us the money,” and let the tax be for only a certain period of time, say 10 years, and then it drops off. Then another slate of projects could be presented, and the people could decide whether to continue the tax or to discontinue it. There’s a hypothetical plan out there by which we could pave half the roads in the county at a cost of about $6 million. But I couldn’t push that plan until the waste is out of the budget. And then, the tax would have a definite time limit, and people would get to vote on keeping it in effect for another slate of projects, or cutting it off.

Q. Do you think the proposed plan is better or worse than no plan at all?

A. Worse. Because, like I said, we’re handcuffing everybody from doing anything on their own, ourselves included.

Q. Is there any way you could tweak the plan that’s on the table that would make it better from your standpoint?

A. No. It’s just not a good plan. If I could make some changes and go tell Joe Voter that it’s a good plan and to vote for it, that would be one thing. But I can’t. In addition to the other problems, District 1 is getting the least out of it in the roads on the list to be paved of all the districts. What am I supposed to say to voters? “Well, y’all are getting the least out of the tax proposal, but go vote for it anyway.” No.

Q. What about the economic development benefit – making the county more attractive to new business and industry?

A. Sounds like a song and dance to me. They should have come up with a better plan. The Economic Development Council hasn’t come to us with a recommendation for what they need to promote the county. They haven’t told us ‘y’all need to fix roads X, Y, and Z because that’s the area we’re looking at for industrial development.’ They haven’t said anything about sewer lines. They haven’t come to us telling us they need A, B, and C resources in order to do a better job.

Terry Sligh, owner,
Terry Sligh Chevrolet

Q. What are your thoughts/comments on the 1-cent tax proposal the commission wants to present to the people of Blount County in a referendum?

(Ed. – The tax increase proposal passed by the commission would levy a .5 percent tax on automotive and related vehicle sales. Including that increase, the composite automotive tax in Blount County (including the 2 percent state tax) will total 3.5 percent. The comparable composite tax is 2.5 percent in some adjoining counties, including Marshall and St. Clair. The current local tax on automotive sales is .5 percent, all of which goes to education. With the addition of .5 percent designated to the county general fund, the total local component of the automotive tax will be 1 percent.)

A. My whole deal is that I have a hard time figuring out how counties adjoining us are managing the taxes they collect, and we’re not able to in Blount County. The answer to raising more money is getting more people and more business in the county. If you get more business, you’ll get more money without having to increase taxes.

Business people have to manage with the money they have coming in. If you have a certain amount of money coming in, you have to work with what you have and budget it as best you can.

As a result of this tax, the county may lose more in sales revenue than we’ll gain in tax revenue. Does anybody slow down and think about that and project what the effect on sales will be? If you raise taxes so much, how much will that reduce sales? If raising the tax rate means you lose $l million in sales, what have you gained?

Talking about economic development, they should know that you can’t promote a county with a high tax burden.

A higher automotive tax hurts my business two ways: it decreases my profit margin on each sale, plus I will lose a certain number of sales to dealers in counties with a lower overall automotive tax burden, because people will go there to buy – to St. Clair County or Marshall County.

If you cut into my profits, then everybody who comes to me wanting donations is going to get turned down: schools, football teams, all the athletic teams, band boosters, civic clubs, social agencies, and so on. When profits are down, I don’t have money for donations.

It comes down to this: if you don’t have enough money coming in to manage the county, you gotta cut expenses.

Jim Sumpter, owner Valley Ford

Q. What are your thoughts/comments on the 1-cent tax proposal the commission wants to present to the people of Blount County in a referendum?

A. If they double it (Ed. – referring to increasing the local automotive sales tax from .5 percent to 1 percent) that puts us at 1 percent which is higher than surrounding counties and higher than any other county in the state. Only Talladega County is as high.

It’s going to hurt business. Word gets around. I probably sell 50 percent of my business outside of Blount County. Those people are not going to keep doing business with us. In addition to asking about price, people who shop on line usually ask ‘What’s your sales tax rate?’ $100 or $200 can make a difference on making a sale or not. And the sales tax on a $30,000 vehicle, with the new rate, will be more than $1,000. The slogan for dealers a little distance from Birmingham used to be ’drive a little, save a lot.’ That’s not going to apply any more.

I know the county needs more money. But they should be cutting expenses. There’s bound to be places they can cut. At one time Blount County had more dump trucks than anybody else around.

Commissioners are not accountants. They concentrate on potholes and roads. So they may not think about the fact that the end result is going to be less than they think. Increased taxes will mean decreased sales, which means less tax revenue than they expected. It’s going to be bad for everyone.