Deadline missed: What now? Cities, county must find a remedy
Published 9:00 am Saturday, May 20, 2023
A new law regarding how taxes are collected in police jurisdictions could have major ramifications for Lanett, LaFayette and Cusseta after the three municipalities missed a state deadline.
The law, known as Act 2021-297, was introduced by State Senator Chris Elliot, R-Baldwin County, and required disclosure of revenue through police jurisdictions. The deadline to file a collections report was March 1, and all three cities, plus more than 100 others around the state, missed that deadline, putting tax funding in jeopardy. The city of Valley did file the paperwork and has met the requirements of the law.
Here’s more on what missing the deadline could mean:
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WHAT DOES ACT 2021-297 SAY?
Act 2021-297 required that beginning March 1, 2023, each municipality collecting license revenue and other taxes or fees within its police jurisdiction outside the corporate limits shall prepare an annual report to be submitted to the Department.
LaFayette and Lanett failed to supply that report.
For cities with a population under 6,000, the police jurisdiction is defined as 1.5 miles beyond the municipality’s corporate city limits. For cities with a population over 6,000, such as Valley, the police jurisdiction is defined as three miles beyond the corporate city limits.
WHY WAS THE DEADLINE MISSED?
It is unclear what led to the failure of these three municipalities to comply with the deadlines. However, City of LaFayette City Clerk Louis Davidson said he was confused by it all and did not know about the deadline when asked in an email.
“Honestly, I just wasn’t aware of the deadline,” he said in an email. “I somehow was confused regarding that.”
According to Elliot, municipalities had three months prior to the law went into effect, then there was five months before the report was due following the initial three months and then another 12 months grace period beyond that.
“So, even with all of that, even with all the press on that, even with the communications put out by the Department of Revenue, who set up a website on this issue, even with the League of Municipalities talking about it at their meetings and talking about it at their clerks meeting, at they’re elected officials meetings and putting out emails and correspondence and putting it in their newsletter and everything else,” Elliot said. “You still had all these municipalities that simply did not bother to file the report required by statute.”
WHERE WILL THE FUNDING GO?
LaFayette City Clerk Louis Davidson estimated LaFayette would lose approximately $152,000, based on revenue from the police jurisdiction from Fiscal Year 2022.
According to Lanett City Clerk Deborah Gilbert, sales tax revenue for Fiscal Year 2022 was $486,400.
According to county attorney Skip McCoy, because the county passed a levelized sales tax split between the municipalities in the police jurisdiction, the county can now collect the total percentage.
The question becomes, who will service these areas if the county receives the revenues? That question remains unanswered at this time as the municipalities and county officials have yet to meet to discuss a remedy at the time of this publication.
WHAT HAPPENS NOW?
Ultimately, while the funding each city stands to lose is important, the fact is that residences and businesses in the police jurisdiction of Lanett and LaFayette will still need those vital services.
According to Elliot, this legislation does not change police jurisdictions and the municipalities have the right to withdraw, however, there is a notice requirement involved before services can be withdrawn – the statute does not change that notification process.
“This has not changed the police jurisdictions, we froze the police jurisdictions where they are,” Elliot said. “Municipalities have always had the right to to withdrawal from their police jurisdiction, there’s some notice requirements associated with it. And if the municipality decides to do that, they certainly can. And they always had the ability to do that. We didn’t change that.
Elliot said this legislation simply made reporting requirements to ensure revenues being collected are being used for the services provided.
“We just made sure there were some reporting requirements,” Elliot said. “And if you fail to meet them, you couldn’t collect the tax revenue. Is it a logical conclusion to say that because those folks can no longer collect the tax revenue that they may withdraw their police jurisdiction? Yes, of course. But that’s something of their own doing. That’s not something that the statute did.”
According to Gilbert, the city is currently working to schedule a meeting with LaFayette and Chambers County.
According to Elliot, there is no opportunity for these municipalities to regain the lost revenue.
Wood, however, hopes over time the legislation will be able to be amended to fix some of the revenue loss to these municipalities.
“We pass bad legislation all the time,” Wood said. “Then we figure out the consequences and we have to go back and amend it. I hope this is one of those we can amend and change. But right now, the answer is no.”
Chambers County Sheriff Jeff Nelson said his department is not equipped to handle the added territory as of now.
“Do we have enough manpower right now with the sheriff’s department to work these jurisdictions? No,” he said. “The one thing I feel comfortable with and that we do have, is working relationships with other agencies. The Sheriff’s Department, the City of Lanett, the City of LaFayette, and the City of Valley we don’t draw boundaries with each other. We all work together. We always have. If something happens in this county, everybody’s coming.”
The issue of manpower for Nelson is not limited to just ACT 2021-297 but an ongoing battle he is facing and Sheriff Sid Lockhart faced before him.
“We have openings right now with the sheriff’s department and I don’t have people applying,” Nelson said. “We’re advertising $18.38 to come work for the Chambers County Sheriff’s Department. You can go work at Buc-ee’s and make $20 an hour. We’re going to have to become more competitive to be able to get the law enforcement officers we need with the Sheriff’s Department to be able to handle what we have. I thank the world every day for the dedication of the men and women that I have and the men and women that Sid [Lockhart] hired and brought over to us.”
For fire services in Lanett, Chief Johnny Allen says the Lanett Fire and EMS services will not be impacted.
“It doesn’t affect my department, it affects my city, but it didn’t affect my department,” Allen said. “ The City of Lanett’s fire jurisdiction is just the corporate city limits of Lanett. People in the fire jurisdiction will continue to have fire services from Huguley and other departments, whichever direction you go.”
WHAT HAPPENS NEXT?
For a short time, it appeared a new bill (HB351), sponsored by Wood and Tracy Estes, might be able to rescue the cities and extend the reporting deadline to March 1, 2023.
However, now it appears that bill is dead.
“What we are being told is that the sponsor of the [original] bill [Elliot] is the chair of the committee that it has been put into in the Senate and that he will not introduce the bill,” Wood said. “So, it’s pretty much dead. I don’t know what we’re going to do to help our cities.”
While Elliot says Wood has been a fierce advocate he disagrees with the extension mainly because the Deptartment of Revenue has already notified businesses in these municipalities about the change.
“[Wood] has been a fierce advocate for them, although I disagree, and not inclined to change the effective date, “ Elliot said. “Mainly because the Department of Revenue, has already sent out notices to every business in the state of Alabama, in these police jurisdictions saying, Look, you know, according to statute, you may no longer collect sales tax. So think about every convenience store, Dollar General, mom and pop, everything else out there has already made all of the changes that are required to make to seek collecting this revenue, because, you know, now the 12 months is up. And I think it is a public policy mistake to start jerking people around one way or the other.”
McCoy said there are several options available, including contracting services or expanding the current coverage area for the sheriff’s office.
“There are options that could be explored, between the county and the municipalities with regards to services, and that would be something that for discussion, So, there’s a lot of things that could evolve from this.”
McCoy also reiterated that there will be public safety coverage regardless of what agreement is reached.
“People should not worry, they will be served,” McCoy said. “From the municipality standpoint, is the Chambers County Commission and the Chambers County Sheriff’s Department always wants to work and will work with the municipalities. We have a close relationship with them, and we will continue to work with them to further the best interest of the people.”