Sales tax

Alexander City Schools superintendent Dr. Keith Lankford tells the Tallapoosa County Commission about plans to use proceeds from the 1-cent sales tax the commission will consider in August.

It’s not a new sales tax but the Tallapoosa County Commission will decide Monday if shoppers in the county will continue to pay a 1-cent sales tax enacted in 2015.

The commission will vote whether or not to leave the tax in place for 30 years to allow school administrators to sell bonds for capital projects.

The funds would allow Alexander City Schools and Tallapoosa County Schools to build $85.8 million in facilities school leaders say is much needed.

Alexander City Schools superintendent Dr. Keith Lankford told the commission in June it is seeking money to build a new high school. Tallapoosa County Schools superintendent Joe Windle said his system will use the funds to build an auditorium at Horseshoe Bend School, a gym at Dadeville High School and a new elementary school in Reeltown. At the time of the original proposals, the projections put estimated costs at $72 million. Commission chairman T.C. Coley said in July it would be one of the largest investments in Tallapoosa County.

“This is probably going to be one of the largest public expenditures that we have ever had in the history of our county,” Coley said. “Between the $47 million being discussed by the Alex City board and the potential $25 million talked about in county schools, we are talking about a $72 million possible investment in the future of Tallapoosa County. Anything larger would likely have been in the private sector.”

Tallapoosa County administrator Blake Beck said the resolution the commission will be voting on Monday will only allow the funds from the sales tax to be used for projects the boards of education have presented to the commission.

“We have signed lists from the boards,” Beck said. “The resolution will only allow the funds to be used for approved capital projects or debt service to those related capital projects. The resolution will require the boards to come back to the commission for changes to those projects.”

The commission originally authorized the tax in 2015 to allow the Tallapoosa County Board of Education to acquire a one-month operating reserve, a state requirement it lacked and said it did not have the means to obtain. Alexander City Schools had nearly four months of operating expenses in reserve at the time. Prior to the 2015 tax, the last sales tax the county commission approved for education was in 1989 to allow the construction of Horseshoe Bend School.

Looking at sales tax records across Tallapoosa County shows increased collections in recent years as shoppers have spent more.

In fiscal year 2016, Tallapoosa County collected $6,752,522 off the 2 cents of sales tax it collected. In fiscal year 2017 it collected $7,090,503. Officials have said the Sabal Trail Pipeline contributed to inflated collections in 2017. In fiscal year 2018 the county collected $7,038,797. Over the three years collections have increased an average of 1.41% per year for the county-collected sales tax.

Alexander City currently collects 4 cents of sales tax on purchases. According to City of Alexander City revenue manager Ward Sellers, 1/8th of the sales tax goes to the Charles E. Bailey Sportplex, 1/8th goes to roads and 1/16th goes to education.

Increases have also seen in the collections by Alexander City. In fiscal year 2015 the city brought in $8,952,029.43, in 2016 it collected $9,513,319.31 and in 2017, with Sabal Trail under construction, $10,331,767.85 was collected. In 2018 the city collected $9,977,300.80.

Between 2015 and 2018 there was an average yearly increase of 2.86% in sales tax collections. In December 2015, the sales tax in Alexander City was increased from 3.5 cents to 4 cents so for two months in fiscal year 2015 taxes were collected at the lower rate.

Dadeville saw an increase in sales tax collection as well. In fiscal year 2016 it collected $1,516,818.14, in 2017 it collected $1,632,718.52 and in 2018 it collected $1,651,802.83.

The increases are continuing into fiscal year 2019.

“Our sales tax collection is up 2.9% year to date over where we were last year,” Sellers said. “Collections are pretty good. The half-cent going to roads is up for renewal in 2022.”

According to the Alabama Department of Revenue, sales tax has increased a total of three times since 1985. In 1985 sales tax was 2 cents and was increased to 3 cents. In 1996 it was increased to 3.5 cents and it was increased to 4 cents in 2015.

The Alabama Department of Revenue has Dadeville currently collecting 3.5 cents of sales tax after increasing from 3 cents in 1998. New Site currently collects 3 cents of sales tax after an increase from 2 cents in 2003.

The State of Alabama also collects 4 cents of sales tax, meaning 10 cents of sales tax is currently collected in Alexander City, 9.5 cents in Dadeville and 9 cents in New Site.

The commission meets at 9 a.m. Monday in the courtroom of the Tallapoosa County Courthouse in Dadeville.

Cliff Williams is a staff writer for Tallapoosa Publishers.