The spending habits of City of Helena officials have been scrutinized in the months following an audit report that revealed the City overspent its budget by $11,172,707 and ended the year with a budget deficit. Now, this week, residents learned during a council work session that a new tax increase is on the table.
City Councilman Chris Willis has proposed a 1-cent sales tax increase, raising the rate from 9 cents to 10 cents.
WBRC reported that, "City officials estimate the tax hike could generate an additional $2 million annually, which would be used to support city services and long-term infrastructure projects."
"It would help ensure long-term financial stability," Councilwoman Laura Joseph said. "It would give us an opportunity to increase the services that we provide to our citizens."
City Councilman Andy Healy said this increase would put Helena on par with sales taxes in nearby towns and cities, according to a CBS42 report.
"At this point, we are just looking to bring in revenue," he told the outlet. "I don't want to talk about if this is to fix the debt, or if there is a way to fix it or whatever with this money, because we haven't even earmarked this for a specific, or brought up a topic for a specific earmark for the money."
Before the vote is taken, the City will hold at least one public hearing, with one lawmaker reporting that two is possible. This would give business owners and residents a chance to voice their concerns.
AL(dot)com investigated the City's spending last month, going over its finances with Sungho Park, a University of Alabama assistant professor of public policy and administration. Park told the outlet, "[T]he city's debt ratio of 0.896 far exceeds acceptable standards of 0.03 and contradicts the city's own fiscal policy. He also found that the city's long-term liability is high-risk."
"Both indicators point to substantial long-term fiscal risk for the city," Park said.
According to the report, "Park also compared what has been dubbed the Helena with 36 other recent city hall construction projects around the country. He noted that Helena's spending for the city hall is out of proportion with comparable projects around the county. He concluded that Helena's cost per resident was significantly higher than others, $813.90 as opposed to the average of $262.10."
Mayor Brian Puckett responded to the news of the audit, saying that it was not a sign of the City's financial trouble, but explained it away as a result of the City's practice of not updating its budget throughout the year.
Puckett announced earlier this year that he would not be seeking reelection, saying at the time, "Over the past four and a half years, I have grown, faced challenges, made tough decisions, and learned from both my successes and mistakes. In a city of nearly 25,000 people, I never intended to make decisions merely to please others. My focus has always been on making choices that will positively impact our community for generations to come. The difficult decisions, though sometimes met with criticism, have always been made with what's best for Helena in mind. While the challenges have been tough, I've never wavered in my commitment to this city, but this will be my last term in office."
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