In just 21 minutes today, six members of the City Council of Mobile (all but Bess Rich) broke faith with the citizens of Mobile, sandbagged taxpayers, hurt the city’s long-term economic development, delayed the impetus for broader tax reform, enshrined bloated municipal government as what amounts to a permanent condition, and showed themselves utterly contemptuous of the basic concepts underlying representative government. It’s time to research whether recall elections are allowed in Mobile — I don’t think so — because all six of those councilmen should be thrown out on their ears.
For a month, now, the Council has been considering a request from Mayor Sandy Stimpson to extend the “temporary” extra penny sales tax in Mobile for two more months, from July 15, 2015 to Sept. 30, 2015, both to generate an extra $5 million in next year’s budget and, quite reasonably, to have the sales tax run concurrently with the rest of the budget, rather than be on a sort of staggered-term arrangement.
Councilman Fred Richardson, as has been his habit, had argued for a permanent extension of the extra penny — which makes the total local sales tax an embarrassingly high, economically counterproductive 10 cents on the dollar — rather than the fraudulent, piecemeal, supposedly temporary approach the city has been using for years. At least Richardson’s proposal had the virtue of integrity, because it stopped the charade allowing the Council to pretend to be taking some extraordinary measure from short-term necessity, rather than admitting that they know no other way to make the budget balance. Still, for good reason, Richardson’s proposal never had a chance — both because the other members of the Council need the fig leaf of the extra penny being “temporary,” and because, more importantly, a sales tax of 10 percent is flat-out bad economics for a municipality.
So the real debate, as the public understood it, was supposed to be between Stimpson’s requested two-month extension, or perhaps a year/14-month extension, and no extension at all. (Yes, there had been at least a little talk of a three-year extension, but it wasn’t given much credence.)
Instead, the Council announced at about 11:15 that they would consider extending the tax all the way through the end of Fiscal Year 2018. By 11:36, they had rammed the monstrous proposal through on a 6-1 vote, with only Rich in opposition. They did this even though the public never had a chance to weigh in on such a lengthy extension, and even though, as Rich noted, the mayor himself is out of town and it would make more sense to wait for the mayor’s input.
This is not how representative government is supposed to work. This is an abomination. This is cowardly: Promise again and again that the tax will be only temporary, then extend it but again with a “temporary” designation, until the Council gets past its election, and then, when a full three years away from the next electoral reckoning, sandbag the public by extending the thing not two months, not one year, not two years, but another three.
Let’s think back. Remember when this idiotic penny first was proposed? Remember how it couldn’t get the votes? Remember that Councilwoman Gina Gregory finally caved at the last minute and voted to approve it, but promised, yes promised, that it would only be for two years? Then when it came time for renewal, who caved again? Why, none other than Gina Gregory. But, she assured us, it was only temporary. Never mind her firm promise the first time. This time she was serious. City government, she said, just needed to buy some time in order to figure out how to replace the revenue.
She and the other councilmen weren’t trying to sell us lakefront property on Mars; they were trying to sell us an iceberg on the surface of the Sun.
So now, without warning, with just 21 minutes of debate, they sic us with a combined sales tax so high it makes Mobile a laughingstock.
Do you ever wonder, driving down one of the major streets branching out from downtown like spokes on a wheel — Government, Dauphin, Old Shell Road, Spring Hill Avenue — why so many buildings are empty? Do you ever wonder why so many commercial sites are dead? And do you wonder why so much development keeps moving just outside the city limits (or at least does so until the city finds a sneaky way to annex more territory where few people actually live and therefore where opposition is hard to rally)? There are several factors of course, but by far the biggest is the difference in sales tax. If somebody who thinks of himself as having a tight budget knows he will spend $100 on an important purchase, not counting tax, well, then, said person will save a dollar or more (a dollar per penny tax) by buying the item where the sales tax is less. When tens of thousands of people do this over the course of a year, and each of them do so numerous times each year, then retailers will locate where the tax is lower. And when the retailers locate in the lower-taxed areas, eventually the population migrates there. They leave their abodes in the city and move outside city limits.
In the long run, this not only hurts economic development in the city, but it also causes a direct revenue loss that is likely to be well over half of the revenue “gain” by the extra penny. The indirect loss to city coffers, via long-term urban out-migration and via a loss of a civic identity as being a vibrant population center, is likely to almost completely wipe out, or even more than wipe out, the revenue “gains” from the extra penny.
Of course, that’s long-term. Short-term, of course a lower sales tax means fewer city revenues. And that, of course, means council members would be required to make harder choices. Oh, the humanity!
Look, this isn’t just theory. About a dozen years ago, at the request of then-Councilman Ben Brooks, the Alabama Policy Institute secured the analysis of the Beacon Hill Institute at Suffolk University to analyze Mobile’s sales taxes, which then were at a combined rate (city/county/state) of 9 cents. Using rigorous economic modeling and hard data, Beacon Hill’s conclusion was that Mobile should cut its sales tax by at least half a cent, and in the long run probably by a full cent, down to 8 cents on the dollar. It said the economic growth would almost make up for the loss of revenue, while so many other good things would happen that it would be worth it.
Well, instead of cutting the sales tax from 9 to 8.5 or 8 cents, the Council a few years later raised it to 10. And now it has repeatedly violated its pledge that the hike would be only temporary.
This isn’t leadership; it’s political hackery.
Mobile’s citizens should be (figuratively speaking only) up in arms. There should be protests, letter-writing campaigns, polite-but-furious phone calls, e-mails… and even social ostracism, for the six councilmen who jammed this down our throats without warning.
When Stimpson proposed the mere two-month extension, he also said that any further extension beyond that should only come as a result of a public referendum. The last time Gina Gregory broke her word and approved an extension of the tax, she had said then that any further extension would only come via a vote of the people.
I like Gina, but does this lady ever keep her promises?
The referendum idea is a good one. Here was Stimpson, a few weeks ago (from the article linked in the paragraph above):
Stimpson said he’s not in favor of a three-year increase.
“It took a lot for me to say we have to go another two months,” Stimpson said about the proposal to extend the tax from July to September 2015. “The reason I say that is because there are other cost savings and things we can do to generate money into capital and address that need.”
He added, “It’s important for the city and my administration to build credibility with the citizens to show that we will be good stewards with their money. That’s why I’m not for voting it in (permanently).”
But now that the mayor is out of town and given no chance to personally object, the Council went ahead and destroyed all credibility by extending a tax that had been pledged to expire, with a mere 21 minutes of debate, and without putting the idea to a vote of the people. How sickening.
So, what would I do instead? I acknowledge that in the short run, some of the revenue from the sales tax is needed, although Stimpson’s team is doing a good job of getting the budget under control and therefore city government shouldn’t cost so much in the future. I would A) extend the tax for two months; B) use the next six months to come up with a more comprehensive tax reform proposal, which could then be debated in public for another six months; C) eventually propose adding a very small amount to city property taxes, in return for permanent elimination of the extra penny of sales tax (but with the increase something less than “revenue neutral,” by static/green-eyeshade accounting; the idea is NOT to merely replace one tax with another!); D) and put the new proposal to a vote of the people.
Again, it’s time to dust off the idea of recall elections. According to this site, such recalls are not allowed in Mobile. More’s the pity. In theory, I usually do not approve of the idea of recall elections. But if they were allowed, now would be the time to use one. The six Council members (again, all but Bess Rich) have broken faith with their citizenry, and they do not deserve the privilege of serving the public.