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Voters Nix 4B Sales Tax Proposition

By County News Today staff

Huntsville voters said no to the City Council’s bid to set up a Type 4B sales tax economic development corporation that would use tax dollars to attract new business and industry and fund ‘quality of life’ infrastructure projects.

With all city precincts reporting, 53.58 percent or 1, 429 voted against the 4B measure, with 46.42 or 1, 238 voting in favor of it.

The 4B sales tax would have diverted one-eighth of one percent of the city’s sales tax, or about $625,000 a year, to establish an economic development corporation that would dole out tax dollars to business and industry and fund “quality of life” projects such as streets, parks, sports complexes and infrastructure.

A majority of the City Council chose to put the 4B measure on the ballot over the 4A sales tax because the 4A is more restrictive in what tax funds can be used for, mainly the creation of primary jobs only.

Proponents said they supported 4B because it would earmark funds specifically for economic development and quality of life projects and that it was a good time to divert sales tax because sales taxes have recently increased with the addition of new retail in the last few years.

4B opponents said the measure would add an unnecessary layer of bureaucracy to city government — the city can already use tax dollars to attract new business and fund quality of life projects. Opponents argued that the 4B could either cause property taxes to go up or force a reduction in city services to cover the loss of sales tax revenues. The 4B corporation also could get the city in millions of dollars worth of debt that taxpayers would have to pay off, even if 4B projects failed.

 

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