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Taxing times

By Staff
Governor's plan puts Hartselle in precarious position
Leada DeVaney, Hartselle Enquirer
Hartselle Mayor Clif Knight and Alabama Governor Bob Riley have a lot in common.
Both are political conservatives serving their first terms in office. They are also both faced with dire financial situations, forcing them to look at tax increases, a move that's an anathema to those who lean to the political right.
And now, it seems as if Riley's solution to Alabama's situation may leave Knight struggling to fix Hartselle's precarious predicament.
"It will definitely affect us," Knight said of Riley's recently released tax increase proposal. "I knew that if we didn't get our plan in front of people ahead of his, we probably wouldn't have a chance."
Knight had been pushing a 10 mill property tax increase to support a $29 million capital improvement plan. The plan encompasses everything from school system needs and highway plans to public works equipment and the parks and recreation department.
Those plans have been put on hold as city leaders scramble to find money to pay for the plan.
But it's not just voter's feelings Knight is worried about. Because Riley has called the Legislature into Special Session, any hopes city officials had about getting a property tax referendum in front of voters are dashed. A property tax referendum would have to be approved by Morgan County's Legislative Delegation before it could go in front of Hartselle voters. And with the Legislature tied up debating Riley plans, that could mean a long delay.
"At the earliest, it would be spring 2004 before we could look at an ad valoreum vote," Knight said.
Spring 2004 would be right in the middle of the next mayoral and city council elections.
"I doubt anybody running for reelection would be willing to put a tax increase out there," Knight said.
Knight said a push for a sales tax increase is growing, but he is not in favor of that idea.
"We're trying to do everything we can to build business here and we have to be able to do what we can to compete against Decatur," Knight said. "We'd just be piling another tax on top of what the state is doing."
The sales tax increase isn't a sure thing either. Unlike a property tax increase, a sales tax increase is subject to economic whims and hard times have meant the closing of several local businesses in recent weeks.
"We're down $90,000 in sales tax from last year's projections," Knight said. "In January, we showed a 19 percent increase from December 2002 but every other month we've either been exactly where we were the year before or under. We've got no one-time revenue out there. We're into a downward trend.
"If we keep going down, we're really going to be look at tightening things up even more. We will be telling out department heads that if they absolutely don't need it, they shouldn't buy it."