David Sher’s ComebackTown for a better greater Birmingham.

Click here to sign up for newsletter. (Opt out at any time)

I don’t get the logic.

I read the headlines and excuses, but they make no sense.

Read this recent headline.

“Pelham raises sales tax for the first time since 2013″

Or this comment by a Vestavia Hill’s spokesperson after a proposed property tax increase recently failed:

“The ‘1Rebel 1 Future’ plan would have raised taxes by 9.8 mills and would have been the first increase in the school tax rate since 1990 had the measure been approved.”

Or Mountain Brook’s sales pitch to justify its property tax increase in 2019:

“The last property tax increase in Mountain Brook was in 1991.”

Why is it necessary to increase the sales and property tax rates every few years?

Has no one heard of inflation?

It’s true Pelham hasn’t raised its sales tax rate since 2013, but consumer prices have gone up by 31% in the past ten years. Folks in Pelham are paying 31% more in sales taxes for the same goods sold in 2013—and that’s before the new tax increase.

The Pelham sales tax rate was 4%. It’s been increased to 5%. That’s a 25% increase in city sales tax in addition to the 31% increase due to inflation. The result is the folks in Pelham will now be paying 56% more in sales taxes than ten years ago for the same goods.

The last time Vestavia Hills increased property taxes was 1990, but housing prices have gone up 147%.

The last time Mountain Brook increased property taxes was 1991. Housing prices have gone up 143%.

I want to make it clear, I’m not against folks voting for tax increases. Public education is a top priority in Mountain Brook and its citizens are willing to spend whatever it takes to give their children the finest education that money can buy.

Good for Mountain Brook! But Mountain Brook had a specific reason to raise its property tax rates.

Keep in mind, however, that a home valued at $434,000 in 1991 when Mountain Brook last increased property taxes is now valued at $1,031,000. So it’s somewhat disingenuous to try to sell a tax increase by proclaiming tax rates haven’t been increased in eighteen years when property taxes had more than doubled.

Alabama and its municipalities’ sales taxes are exorbitant

Alabama has the 5th highest sales tax rate in the U.S.

Two states, South Dakota and New Mexico, actually lowered their sales taxes last year.

Five states have no sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon.

Alabama’s sales tax is 4%. Jefferson County is 1%. Municipalities in Jefferson County charge 4 to 5% to bring the total to as much as 10%.

In defense of Pelham, most Jefferson County municipalities impose the same 5% sales tax as Pelham’s new rate –bringing the total to 10%. That 10% rate is more than 93% of the counties in the nation.

And according to the Tax Foundation, Birmingham has the 7th highest sales tax rate of any major city in the U.S.

Is there no limit to how much we are willing to pay in sales taxes?

The folks in Arab Alabama pay 12.5% sales tax—the highest in the state.

Is it okay to keep raising sales taxes every few years?

ComebackTown is focused on how our region can collaborate to compete, be more prosperous, and save money.

Jefferson County with its 35 municipalities has 35 mayors, 35 cities councils, 53 fire departments, 23 police departments plus the Jefferson County Sherriff’s Department, 18 jails, and 14 emergency 911 call centers.

Nashville and Jacksonville (who have metropolitan governments) don’t have dozens of duplicate facilities and bureaucracies.

I believe we have reached our sales tax limit.

Next time our political leaders tell us they want another sales tax increase because we haven’t had an increase in years, we must demand they find a way to work together to eliminate the insane amount of duplication.

David Sher is the founder and publisher of ComebackTown. He’s past Chairman of the Birmingham Regional Chamber of Commerce (BBA), Operation New Birmingham (REV Birmingham), and the City Action Partnership (CAP).

Click here to sign up for our newsletter. (Opt out at any time)