Officials hammer out tax proposal

Commissioners in Colbert and Lauderdale counties are about to get to work on a proposal that could lead to a sales tax increase of up to one-half cent for the purpose of attracting industry to the Shoals.

Both commissions are expected to discuss resolutions Tuesday, the first step in the process.

If approved, the area’s state legislators will be asked to introduce a bill giving commissioners authority to increase the sales tax.

The topic has been at the forefront of debate since the Shoals became a finalist for a railway car manufacturer that is looking to build a facility that would employ 1,500.

For the Shoals to be successful in the recruitment, however, several millions of dollars in incentives could be needed.

With local governments saying they can no longer afford to borrow money or take it out of their operational budgets for industrial recruitment, area leaders have discussed the sales tax increase as a way to meet the obligation.

The Shoals Economic Development Authority met with governmental leaders a little more than a week ago to discuss a process to handle the money and how to implement accountability.

Although a consensus was reached during the meeting, other proposed resolutions have surfaced.

The commissioners will likely review several of those on Tuesday. Lauderdale commissioners meet Tuesday afternoon in a work session, while Colbert commissioners have a regular session Tuesday night, at which time a vote could be held.

“We will discuss it and try to reach an agreement on the proper verbiage,” said Lauderdale commission Chairman Dewey Mitchell.

“If we can get an agreement on the wording, we’ll try to put it on the agenda and vote it either up or down at our March 12th meeting.”

Colbert Commission Chairman Rex Burleson said both commissions need to send the same proposal to Montgomery.

“There’s no sense in sending two different ones down there,” Burleson said. “We have to come up with something that works for both of us.

“There are a lot of different drafts out there, and before we come up with one, I’m going to have to talk with the other commissioners.”

The proposal debated during a Feb. 22 meeting called for the SEDA board to be reduced from 24 to 12 members, with eight of those new positions being held by elected officials.

Those elected officials would be the four Quad-Cities mayors and representatives from both commissions. Florence and the Lauderdale commission would each appoint an additional board member to give each county four representatives.

The elected officials would then form a finance committee to determine what projects would receive money from the sales tax fund.

Among the other proposals circulating in the community is one labeled as a “draft resolution for discussion purposes.” Efforts to determine the author of the proposed resolution were unsuccessful and numerous people involved in the discussions say they do not know.

That proposal would lead to a separate entity created to oversee how money is spent from the incentive fund. Like the proposal agreed upon recently by elected officials, this resolution calls on the same eight elected officials to serve on the committee, which would be named the Shoals Industrial Development Committee.

That resolution, however, contains language that has raised eyebrows among some officials.

It would give the committee authority to use the sales tax money to fund “operating budgets of economic development authorities and organizations whose purpose is to attract industry and develop economic growth ...”

Some see that phrase as a way for money to be funneled to organizations – both public and private – other than SEDA.

“I haven’t seen this,’’ said Lauderdale County Commissioner D.C. Thornton. “I’m

not for any open-ended deals and that’s what this sounds like it would be.’’

Lauderdale Commissioner William Smith also has concerns about the wording that would allow different organizations request funding.

“The citizens I have heard from don’t want this to be some type of slush fund that is open to whomever,’’ Smith said.

Muscle Shoals Mayor David Bradford, who would sit on either of the committees, said he has not seen the second resolution, but worries that the wording, as relayed to him by a reporter, “could lead to public money being spent on any number of private interests.”

“I would need to see exactly what it says, but I don’t think that’s what the people would want,” Bradford said. “Special interests need to be kept away from the charge that we have as government officials.

“It’s a good idea to have a committee overseeing it, but I don’t see the need to create another agency. The other draft we discussed had the same elected officials overseeing the expenditures from the account. So, why do we need to create a separate entity? That worries me some.”

Bradford did not close the door to the idea of creating a separate entity. He added that the issue at hand – getting a funding source to compete for what has become known as “Project Tiger” – is too big to argue over “unless it opens the gates to special-interest groups that could use public funds for private matters.”

Bradford said the money needs to be used only to provide incentives to companies bringing good jobs to the Shoals and for creating and preparing industrial parks, constructing speculative buildings and training the area’s labor force for specific skills needed for new jobs.

Macke Mauldin, chairman of SEDA, said he would also like to see the wording of the alternative resolution. He said that in general he likes the proposal elected officials agreed upon during the Feb. 22 meeting.

“I’ve only seen one (proposed) resolution that has the vision to meet the Shoals’ need and has the integrity of accountability and forward thinking that transcends individuals and politics – and that’s the one everyone seemed to be in agreement on,” Mauldin said. “It has the integrity and accountability that reaches a level rarely seen with any organization in the county, state or country.”

He said there should be criteria set up “that establishes priorities for the money – what it can be used for and what it cannot be used for.”

Mauldin said the incentive fund is crucial to the Shoals and could be “more significant to the future development of this community than building the Wilson Dam 100 years ago.”

The Shoals Chamber of Commerce has been supportive of the notion of a Shoals-wide resource for an economic development fund.

Chamber President Steve Holt says that hasn’t changed.

Holt said he hasn’t seen any version of the proposed legislation.

“At this point, we’re going to support whatever the two counties and legislative delegation work out among themselves,” Holt said.

The chamber board issued a statement in February favoring a fund but said it opposes a sales tax increase.

It also states the fund would help the Shoals compete for “Project Tiger” and other projects and assist existing industry.

Holt said the chamber doesn’t want to go beyond that statement for now.

“We’ll try to keep it at that,” he said. “That way it won’t muddy up the water.”

Chamber board chairman Jay Klos agrees, saying a single fund is important.

“We are 100 percent behind the fund and the governments developing the fund,” Klos said. “We want to make sure it’s done, because we think it’s a pivotal point for our area.”

He said the chamber has not heard anything officially about the fund.

“We have not talked with any official, whether it’s Lauderdale County, Colbert County or state legislative officials,” he said. “If anybody asks our help, we’ll be more than happy to provide that.”

State Rep. Tammy Irons, a member of the local legislative delegation, said she doesn’t want to comment on any specific draft resolution until she sees the final version.

She added that she looks forward to seeing what the commissions produce, and is optimistic about their success.

The Legislature passed two economic incentive bills during a special session this past week. Irons hopes that helps set the mood for the regular session.

“What we did this week in Montgomery shows that Alabama is open and ready for the world,” Irons said. “There also was a lot of talk about northwest Alabama and its potential to land this company.”

The regular session starts Tuesday and can run up to 105 calendar days.

“So we have plenty of time to get something passed this session,” Irons said. “We’re still behind the economic incentives fund. It’s still on go.”

Tom Smith can be reached at 332-0140 or tom.smith@timesdaily.com.

Bernie Delinski can be reached at 740-5739 or bernie.delinski@timesdaily.com.