Rainbow City Council raises sales tax to fund capital projects; rate will be 10%
The Rainbow City Council on Monday approved a 1-cent sales tax increase that will be dedicated to capital projects.
Mayor Joe Taylor said it's estimated the additional percent will bring in between $1.4 million and $1.7 million to the city. He said added tax will go into effect Dec. 1, 2022.
The money will not be part of the city's general budget.
The council also authorized Taylor to enter into an agreement with Frazer Lanier Investment Firm to seek bonding. Taylor said that was so the city can begin work on projects soon.
The project mentioned was a Quality of Life Center, identified in Rainbow City's master plan as a "catalyst project."
Taylor said the envisioned center will serve residents from "eight months (old) to 88." He stressed that the master plan was developed with input from Rainbow City residents and people outside the city, aimed at responsible growth in the city.
"As we grow, it takes more," Taylor said. "We're going to be good stewards of your money."
He pointed out there's been no sales tax increase in the city since 2005.
The hike brings Rainbow City's local sales tax to 5%, putting it in line with Altoona, Attalla, Gadsden, Glencoe, Hokes Bluff and Southside among Etowah County municipalities.
Taylor and other council members stressed that no one like the idea of more taxes. Council member Anita Bedwell said she's opposed a similar tax measure in the past, when the money would have gone into the general fund.
The city is growing, she said, "and we would like for it to grow in an organized manner, in the way that serves our people best."
Developing a family life or community center that will provide more indoor and outdoor activities is part the plan for organized growth, Bedwell said.
Only one resident spoke against the measure during a public hearing prior to the request for immediate consideration and passage of the tax ordinance. Incoming state Rep. Mack Butler said he opposed raising the sales tax because it is a growth tax. At a time when everyone is dealing with inflation, Butler pointed out that rising prices mean rising sales tax revenue.
As the price of a loaf of bread goes up, Butler noted, so does amount of money a 9% sales tax would give to the city, without increasing the rate to 10%. He said there is never a need to raise sales tax.
Council member Jeff Prince, along with Taylor and other members of the council, said they valued Butler's opinion. He said the master plan included the opinion of community members about the city's needs, and this tax money will be earmarked for those projects as well as water and sewer projects.
This article originally appeared on The Gadsden Times: Sales tax increase will fund projects in Rainbow City's master plan
