LETTER TO THE EDITOR: LaFayette should lower the sales tax to fix money woes
Published 3:40 pm Wednesday, July 7, 2021
We need to LOWER the sales tax to 7% to fix the city’s money woes, not RAISE it to 10%.
DO WHAT? OK, now that I have your attention, let me explain.
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I attended the public meeting last Monday, (June 28) to discuss the Mayor’s proposed 1% sales tax increase to cover the many shortfalls in the city’s revenue vs. the actual expenses involved in running this city. As Mayor Vines rightly pointed out, we are barely managing to cover the essential day-to-day operation costs, with little or no room for unexpected expenses, let alone the money needed for projects that would make LaFayette a more desirable place to do business and to live. On the surface, a one percent sales tax increase may sound like a good idea. After all, it could possibly add $200,000 to $250,000 of revenue to our city’s budget. However, the problem is that an additional couple hundred thousand dollars or so a year is a drop in the bucket compared to all the needs pointed out by our mayor. It does not fix the problem. It’s like trying to stop an artery bleed with a band-aid.
Everyone agrees that we need more businesses and people moving into LaFayette than moving out if we are going to stop the bleed. By the way, our population is currently shrinking by about 1.04 % per year.
My question to the Mayor and the Council is how is raising the sales tax going to encourage businesses, and the people that will follow, to locate here, to build here, to spend here? It won’t, nor will it do anything to discourage people from moving away, seeking more employment opportunities, more shopping choices, and yes, more entertainment options, which I may discuss in my next editorial.
LaFayette is the county seat and we are surrounded by well over a dozen communities within 10 to 30 miles, most of which have sales tax rates of 9 or 10 %. If we were to lower our sales tax to 8% people would sit up and notice. And yes, we would see an uptick of people shopping here, especially for big ticket items, such as construction materials, equipment sales, part sales and such, where a 1% or 2% of the total cost of items makes a big difference. An 8% sales tax may also be an encouragement for a few more retail establishments to locate here, as well as an incentive for our local people to shop here, when possible, rather than going out of town to shop.
Lowering our sales tax to 7% would be a game changer. With up to a 3% competitive advantage LaFayette would be an ideal location for new outlet stores due to our central location, more retail stores, more equipment outlets, more everything. With that, more employment opportunities, more shopping opportunities, and yes, more entertainment options would follow, all of which provide the positive revenue streams our town desperately needs. Additionally, it would be a blessing to the 23% of our population living below the poverty line.
But how can The City of LaFayette possibly afford to cut its revenue (in the short run) when it can barely cover its current bills? As I see it, the Mayor and City Council have three options moving forward:
4Increase the sales tax to 10% which will do little or nothing to stop the bleed, possibly doing more harm than good, and certainly won’t encourage the much-needed growth and positive revenue streams.
4Leave the sales tax at 9%, or unwisely raise it to 10% then dip into our Alagasco Gas sale money, sell some of the extensive real estate the city owns, tap the federal stimulus money we received, and use that money to make up the difference between what they collect versus what they need. But as our city clerk will attest, that is an option, but it isn’t a sustainable option. The money will run out .
4The third option is to sell off some of the excess real estate the city owns, dip into some of our Alagasco Gas sale money if necessary, utilize the federal stimulus money if possible, and finally to invest those proceeds into funding lowering our sales tax and see real growth begin to happen.
Some people may think I’m crazy, but I’m not stupid. Regardless, if you are opposed to the 1% sales tax increase, make it known to your councilperson, and please come to the next public meeting at the Farmers Federation (ALFA) building Monday, July 12 between 5 p.m. and 6 p.m. Ah heck, come even if you are in favor of the increase.
Here to Stay.