|City of Huntsville Proposes One Percent Sales Tax Increase to Pay for State Roads Plan
December 5, 2013
The City of Huntsville announced today it will recommend the City Council approve a one percent sales tax increase, effective March 1, 2014, to match its share of a $250 million roads package proposed by the Alabama Department of Transportation.
ALDOT Director John Cooper announced Monday the State would build seven road projects over the next five years, critical to the Huntsville metropolitan transportation plan, if the City would fund half of the cost. Cooper termed the plan "transformational" for the Huntsville area and said the City needed to act swiftly if it wished to accept the offer.
Mayor Tommy Battle called the State's roads package a generational opportunity to take care of Huntsville's critical road needs and significantly enhance the regional transportation network.
"Our infrastructure is essential to our quality of life, and that means keeping that average 18-minute commute time to and from work" said Mayor Battle. "Huntsville is a regional employment center, and each of these road projects improves our ability to move traffic in congested areas."
The additional one percent tax is projected to generate approximately $30-$35 million per year. It will allow the City to match the State's $125 million funding requirement and commit any remaining funds to new road projects and capital/economic development projects.
"No one wants to raise taxes, but these roads are not wants. They are essential needs," said Mayor Battle. "The sales tax allows us to proceed with a "pay as you go" approach and does not impose debt on future generations."
Huntsville's last sales tax increase was in 1989. At eight percent, the City's tax is among the lowest in the State. The one percent would bring the City's combined sales and use tax rate to nine percent, in line with other urban areas surrounding Huntsville including Athens, Arab, Madison, Scottsboro and Decatur. The new rate is still lower than Birmingham, Montgomery and Mobile at 10 percent. The proposed one cent increase in Huntsville would not apply to automobile sales.
City Finance Director Randy Taylor said Huntsville is well recognized nationally for its strong fiscal management and the additional tax won't change that perception.
"Through Mayor Battle's leadership, we have made significant cuts in costs while maintaining public services and learned to do more with less," said Taylor. "During the recession, the City earned the highest credit ratings possible for five straight years, and the rating firms recognize the value of providing quality infrastructure to promote economic growth and support quality of life."
Huntsville embarked on a Restore Our Roads campaign in June after learning ALDOT had deferred, delayed or canceled $450 million in the City's 10-year metro road plan.
"The five-year roads plan is the best possible solution in a tough situation," said Mayor Battle. "Inaction is not an option for our infrastructure. By moving forward with this funding, we will secure our road plans for the next five years and beyond."
More information about Restore Our Roads and the Alabama Department of Transportation's five-year roads plan is available online at www.huntsvilleal.gov/restoreourroads/.
For more information, contact:
Kelly Cooper Schrimsher, Director of Communications, Office of the Mayor, City of Huntsville, 256-427-5006 (w), email@example.com
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