Council passes sales tax increase, 5-2

MOBILE, Ala. (WALA) - After months of debate, the Mobile City Council passed a vote to increase the city's sales tax rate by 1 percent on Tuesday.

Sales tax in Mobile will now be 10 cents on the dollar, up from nine and the change will sunset in 2015. The council had until Oct. 2 to figure out a revenue source for the city's budget.

Applause erupted through the city council's chamber as councilwoman Gina Gregory said she would support a tax increase. Gregory said some have called her a 'caver,' but she said she can't watch her city deteriorate any longer.

Gregory said she voted in favor of the tax increase to support public safety, but she questions why it took a tax increase to bring failing equipment to the forefront.

"Why has it taken so long to bring these problems to the council, shouldn't it have been brought a long time ago?"  Gregory said.

Gregory also doesn't believe the city is facing a $29 million deficit as Mayor Sam Jones claims. Nonetheless, she provided the needed vote that helped pass the sales tax increase, again the swing vote.

Bess Rich and John Williams held their ground, voting against the increase.

Even though there are stipulations and a sunset date Williams said it doesn't soften the blow.

"It is like getting punched in the gut and the person that punched you picks you up. Time now to make sure that the money earmarked stays earmarked to where it is needed most, and addressing the priorities of our city," said Williams.

Here's how the tax increase breaks down:

• 25 percent of the money generated will go to capital budget;
• 25 percent to economic development;
• 25 percent to an escrow account for public safety and service;
• and 25 percent to the general fund.

Jones had originally asked the tax be tied to the unemployment rate, instead it will sunset in July of 2015.

"[The sunset date] Gives us an opportunity to look at where we are, which will be right in the middle of Airbus production which is good, most importantly moving in a positive direction," said Jones.

The compromise came down to the wire, with the council attorney meeting separately with members, as well asides between council members and Jones during the meeting.

The mayor's budget was unanimously approved Tuesday as well. Provisions of the budget cut funding for some performance contracts, including the Mobile Sports Authority.

See the budget amendments here.

The council also approved a "longevity payment" today.

After fears of rising health care costs are abolished — city  employees will actually see a little more green.

Full-time city workers who have been employed with the city between December 2011 and December 2012 are eligible for up to $1,000, and it's based on the number of months you've worked.

Jones said the payment, which will be made at the end of the year, is not a bonus because those are illegal.

The vote came as the council, stared a multi-million dollar budget deficit — and Tuesday deadline to approve a city budget — in the face. The same increase was voted down earlier in September, then tabled at a meeting later that month. It was also rejected in May.

Smoking amendment fails

In addition to dealing with the budget, the council voted down an ordinance to amend the city's newly enacted smoking ban, which took effect on Monday. The law remains unchanged.

One of the first speakers to the council was a Wilmer bar owner, who said the smoking ordinance will hurt her business.

"It will cause me and other businesses major loss, jobs for instance. There will be a domino effect," said the woman, whose business was annexed into the city of Mobile.

Mobile County Health Officer Bert Eichold encouraged the city council to keep the smoking amendment on the books as is for six months. He said reexamining the issue after six months should give the council time to see what did and did not work.

Restaurant owners have complained the smoking ban hurts their business, especially during happy hour. They have said they are losing business to bars that are allowed to have smoking inside.

The smoking ordinance bans smoking in all public places including downtown sidewalks and public parks. It also bans smoking in restaurants' outdoor seating areas before 8 p.m.