1-cent sales tax increase could be sought to pay for hospital

Published 11:37 am Wednesday, May 15, 2013

Local and state officials seem to have decided on a sales tax increase to pay for the construction of a new hospital in Chilton County.

The Chilton County Hospital Board on April 22 asked for, and received, the county commission’s support of an ad valorem tax increase. But state Sen. Cam Ward and Rep. Kurt Wallace argued instead for a 1-cent sales tax bump across the county during a board meeting Tuesday, and attendees including commissioners and mayors seemed to concur.

Any tax increase in the county would have to pass through the Legislature during its next session, which begins in January 2014, and be presented as a referendum of Chilton County voters. The measure would likely appear on local ballots during the June 2014 Primary Election.

“I think the majority of the people in this county would support that,” Wallace said about proposing a sales tax increase.

Several officials said Tuesday they had heard opposition to the originally proposed 5-mill ad valorem tax increase, which residents would pay through property tax and vehicle registration fees.

The primary argument was that a sales tax would be more fair because it would paid by a larger percentage of residents. Citing numbers provided by the Chilton County Tax Assessor’s office, Wallace said about 25 percent of people in Chilton County would pay the full, increased property tax, while most if not all residents pay sales taxes in the county.

Ward said a 1-cent sales tax increase would also produce more revenue than a 5-mill ad valorem tax increase. Officials estimated the sales tax bump would bring in about $3 million per year, while the ad valorem increase would have accounted for about $2 million per year.

The current sales tax rate is 8 percent in Clanton, Maplesville, Thorsby and unincorporated areas, while Jemison’s rate is 9 percent.

Ward and Wallace also said any tax increase would need to have a “sunset” provision, meaning the tax would expire after a certain number of years.

Board members said they plan to calculate how long the tax increase would need to last, then report back to the commission for approval. Then, the legislators would plan to bring up the measure during the next session of the state’s lawmaking body.

“I think most of the community is going to rally behind this,” Ward said.

Allen Payton with the hospital board said the group first asked for an increase in ad valorem taxes because that form of taxation is considered more stable, and funds had been generated for medical care in the county previously through ad valorem taxes.

In addition to those already mentioned, Tuesday’s hospital board meeting was attended by Clanton Mayor Billy Joe Driver, Jemison Mayor Eddie Reed, Maplesville Mayor W.C. Hayes, Thorsby Mayor Jean Nelson, county commission chairman Allen Caton, county commissioner Shannon Welch, Jemison city council member Sam Reed, Chilton County Industrial Development Coordinator Fred Crawford, and Kevin Flynn, a representative of St. Vincent’s Health System, which has worked with the hospital board on opening a medical facility in Chilton County.

Based on help from St. Vincent’s, the hospital board has estimated a new hospital would cost $16-$20 million.