Sales taxes stablePublished 2:00am Saturday, July 6, 2013
Almost six years ago, the city of Brewton began dipping into funds in reserve for the city to get by with finances including paying the bills and paying employees.
In an effort to rebuild those reserves that were nearly depleted because of the economic need to use the funds, city officials voted to increase the city sales tax by a penny.
It’s been six months now since the Brewton City Council imposed a 1-cent city sales tax increase. Now, the question is “how are we doing?”
Brewton City Clerk John Angle said the revenue increase for the city is doing just “fine.”
“We been seeing between $90,000 and $120,000 a month with the increase as predicted,” Angel said. “But, does that mean we’re fat and healthy? The answer would be no.”
Angel said the city still has a long way to go to get back to a healthy financial state and get ahead of the game.
“The revenue is good for the city but we’re not ready to move back to doing projects,” Angel said. “It’s still going to take the whole year to get back in the black. Right now we’re looking for stabilization.”
Angel said the revenue seen as a result of the increased sales tax will help to repair the loss of tax money lost since the dip in the economy back in 2007. “Nobody expected this dip would go six-plus years,” Angel said. “When this happened in 2007, we thought it would be over sooner than this.”
Angel said the city is just now able to see the light at the end of the tunnel when it comes to city finances.
“We are just able to breathe now,” Angel said. “We still have to get over the five-year revenue drop and get healthy again.”
In 2007 — when the economic dip hit the city — the coffers held about $900,000 in reserve funds. That fund had less than $100,000 in January when the sales tax increase went into effect.
Angel has said the annual increase in revenue from the sales tax could be as much as $1.5 million — an increase that would help rebuild reserves putting in place an emergency net to pay for needed projects and emergencies.
The funds now being rebuilt by the increased revenue will allow the city to once again look at projects that will improve quality of life and move the city forward with economic development, officials said.