Andalusia business owners discuss proposed sales tax increase
ANDALUSIA, AL (WSFA) -
Business owners in Andalusia gathered Monday night for a town hall meeting on a proposed sales tax increase. The gathering came a day before the City Council is set to consider the change.
Mayor Earl Johnson has proposed raising the city's sales tax from 2% to 3.5%, bringing the total combined sales tax residents pay to 9.5%. The revenue would be used for infrastructure improvements, education and retiring debt.
Business owners worry the increase could drive customers to other towns or even across the state line.
"With the average customer spending $50 or $75, it can add up over an amount of time," said Marrianne Dubose, a business owner who organized the meeting.
The city received an $8.6 million ATRIP grant for improvements to South Three Notch Street, but has to come up with $2.5 million in matching funds. The money would also use to match grants for school infrastructure improvements and other costs.
Another chunk of the increase, 0.5% of the increase would be earmarked for Andalusia City Schools, for help with a $6.5 million project to construct a junior high school on the high school campus and a new building for sixth graders at the Andalusia Elementary School campus.
Mayor Johnson says the sales tax increase should not hurt the revenues of businesses in Andalusia.
"It doesn't happen out there across the state, and I don't think it will happen here either," he said.
Andalusia's current 2% city tax rate is one of the lowest in the state, based on a comparison compiled by the city. The city council is set to consider the increase at its meeting Tuesday at 6 p.m. If approved, the increase would take effect in July.