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Chip Drago
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They just don't get it

By Chip Drago
Mobile Bay Times
They just don't get it.

To the decision-makers at City Hall, "they" is an uninformed public, critics armed with assumptions and few facts.

To the business community, "they" is CIty Hall politicians and bureaucrats whose infatuation with themselves and ability to vote themselves revenue is as infuriating to outsiders as it is intoxicating to the insiders.

"It" is agreed upon -- the city's financial crisis, an $18.5 million hole in this year's budget that requires an immediate $5 million fix as well as a greater shortfall between revenue and expenses that will need bridging in fiscal 2011.

Most of the public sector is behind Mayor Sam Jones' administration's call for a temporary sales tax increase that would right the ship through Sept. 30, 2011 when, presumably, calmer seas and happy days are here again.

City leaders maintain that they have cut to the bone and further cuts will seriously impair the delivery of basic services, including public safety. One taxpayer recently said he was not buying it "as long as one urban forester remains on the payroll."

An unconvinced business sector sees a drunk driver at the wheel of a car in
the ditch promising
the police "ossifer"
that he will give up
drinking as his
New Year's resolution.

With a few exceptions,
most of the rhetoric,
hand-wringing and
finger-pointing has
come from those
inside City Hall.

MBT invited the thoughts of some in the business community:

"I do not know the inner workings of the City budget. I do know, however, about participating in the  oversight of a budget of some $80 million and I can tell you that it takes some intentional discipline and excellent management to keep tabs on what is going on. It is no easy task and requires constant vigilance.

I suspect that our leadership has failed us in this regard and now they are asking for a 'fix' from our pocketbooks.

It is a difficult time for institutions, municipalities, business owners and individuals. We must look in the mirror and face the problem. We need to find ways to reduce wasteful spending, reduce mismanagement and over funding of outdated programs wherever they appear. If we have a Mayor and City Council that will help that to happen, then I believe that the citizens will be happy to help. Otherwise, I fully understand the dissatisfaction and disgruntled reaction of the public.

Remember 'when your out-go exceeds your income, your up-keep will be your downfall." Not sure who said that first, but it is right on target."
-- DRB,
south Mobile businessman

"Mobile County was able to balance their budget without a tax increase.

Bigger government is not a good thing. Lower taxes and smaller government is what this economy needs in order to rebound.

Payroll costs are not the only costs that can be shaved.  There are millions of dollars spent on performance contracts and other contracts that could be totally eliminated without affecting basic city services.

If the (sales) tax (increase) is passed, EVERYONE knows that it will not be temporary.

If there was a referendum on this issue, the vote would not even be close, probably 65/35 against the tax. Let the people vote on it.

The scare tactics he (the mayor) is using with the media are a joke. While nobody wants to see people lose their jobs, layoffs are happening everyday in Mobile. The reality is that the economy is not
improving and businesses (and governments) are now required to make extremely difficult decisions.

I have a client that drastically cut his workforce earlier this year which resulted in over 100 people losing their jobs. This company could not simply raise their prices to increase their bottom line; they had to cut costs in order to stay in business.

He (Sam Jones) wasn't worried about layoffs when he was handing out big fat contracts to all of his out of town campaign donors!

I hope (Councilwoman) Gina (Gregory) can stand her ground and not be bullied ..."
-- CLD,
accountant

"It is difficult to determine if the sales tax is the only solution. The published City of Mobile budget does not offer sufficient information to evaluate the alternatives. It seems on the surface that multiple alternatives exist if the administration had the will to impose them.

Total compensation of city workers is unknown. I have not seen any evaluation of the total packages to include base salary and benefits. While city workers suggest their compensation lags other cities, so does the compensation of workers in the private sector. My guess is that many folks in the private sector would enjoy the opportunity to interview for a city job."
-- ETL,
real estate executive

"The one percent (sales) tax (increase) needs to be passed. This situation has been caused by a failure of the city to meet its revenue projections."
-- HTB,
college professor

"The Mayor is off the mark! And his rocker!

Is the City of Mobile the only government in this country that is run efficiently and effectively? 

Excepting police, fire and emergency workers, my guess is that for most every department within City government, for every five City employees, if one was given the pink slip, you wouldn't notice any loss of production from that department. Now, I am not unsympathetic to any employee who loses his or her job, especially in this terrible economy. I would hate it for them and their families. However, that is life in the real world of private business. If we are overstaffed, we would make the difficult decision to let someone go. Unfortunately in Government, they don't understand this basic concept! 

The truth is the Mayor prepared an irresponsible budget and HE should be made to live with it, not the customers who already pay too much tax into the system. I am fed up with Government believing that they HAVE to balance the budget with increases in revenues. In the real world, we can't just increase revenue. To balance our budgets, we trim expenditures, even if it includes laying off personnel.

The Mayor made a terrible mistake with his 2009-2010 budget and he should have to live with it, not us. He should admit to the employees that he and only he is the one responsible for their job loss, not the taxpayers."
-- VUT,
CPA
 
"I think that a sales tax hike might help in the short term, but not long term. The city needs to cut a lot of dead wood out of the overhead. We have far too many folks making too much money. Just look at the list that was published yesterday.

City employment is like the Post Office: it's a lifetime deal and you don't have to work too hard (this does not include the public safety folks) to stay on the payroll. When the mayor says the sales tax increase is the only "viable" solution, he means it's the only viable solution for him politically.

When better times return, we need to start building up a rainy day fund of say $5 million or so and keep the politicians' hands out of the pot for the next down turn."
-- CTL,
businessman

"Almost every person I know and every business I deal with has less money to spend today than they did two years ago. Competition is greater for every dollar being spent than I've seen in my 35 years in the retail industry.

Going from a 9% to a 10% sales tax may not seem like a a significant increase, but it amounts to an 11.11% increase in the tax and it will cause virtually everyone to change their buying habits in these difficult times. Not only will many more people drive out of the city to make large purchases, but almost everyone will buy more than ever over the Internet in order to pay no sales taxes.

This sales tax increase will be another nail in the coffin of many Mobile retailers that are just trying to survive until the economy improves.

The city will receive a lot less sales tax revenue from this tax increase than they are projecting, due to the reduction in retail sales it will cause and the reduction in business license fees.

The real solution is to cut non-essential services, implement a garbage tax and cut the city sales tax rate from 4% to 3 1/2%. This 1/2% sales tax cut would show everyone that the City of Mobile is open for business and would significantly boost retail sales in the city. This increase in sales will make up for the cut in the tax rate and revenue from business license fees will increase with the increase in sales. More retail sales in the city will also create jobs in the private sector and that is something we desperately need right now.
-- OEC,
businessman

"You can't reform a junkie with more drugs."
-- OSP,
food broker

"I feel I am a responsible businessman who is concerned for both the economic viability and quality of life of Mobile. I vehemently oppose the proposed one percent (1%) sales tax increase because it will drive residents outside of the City to make purchases.

Further, this sales tax increase would be a disincentive for non-residents to come into the City to shop. The increase in the local sales tax from eight percent (8%) to nine percent (9%) caused the explosion of growth in west Mobile and the population exodus to Baldwin County. To make the same mistake again is unconscionable.

Indeed, this policy will ultimately hollow out retail business in Mobile and reduce the tax base causing a recurrence of City deficits in the near future.

I have supported Mayor Jones in the past, but in this case I believe he and his supporters are attempting to stampede the City Council into voting for the tax increase without looking for alternatives. We in the business community have made cuts in advertising, inventory levels, and personnel. Mobile City government can look for ways to make spending cuts as well.

However, with that said, the problem really is the decline in City revenue. I have proposed to two Council members surcharges on utility bills. It seems fair to me that individuals and companies using the most electricity, water, etc. would pay the most. A utility surcharge would not have the regressive    characteristic of a sales tax increase.

I think a policy of spending cuts with utility surcharges would close the budget deficit without causing consumers to go outside of the City to shop."
-- PRS,
"big ticket" retailer

"(The mayor is) Somewhat off the mark. I think that some of the assumptions which were made early in the budget process by the administration were unreasonable. This made it hard to avoid some discretionary expenditures which were made without a
realistic picture of the impending financial shortfall. The financial difficulty seemed predictable, and was, in fact, predicted by at least one council person."
-- NHC,
attorney

"A 1% increase is off target. Not because 1% is too much of an increase in and of itself, but because a sales tax of 10% is too high. As the owner of a retail business within the city limits of Mobile, I regularly lose shoppers to businesses within lower sales tax jurisdictions. This is especially true for larger ticket items. If 9% is causing shoppers to look outside of the City of Mobile for products, it is reasonable to expect a sales tax of 10% to increase this behavior.

Spending cuts need to come first, followed by work force reduction then a sales tax increase if required."
-- HWS,
retailer

"In the first place the Mayor was going to present a request for a 10% pay reduction for all employees. This was met with great opposition, so they went back to the drawing board, so to speak.

Then they looked at a tax (garbage fee or sales tax) to increase income instead of reducing employees' pay.

The City's attrition assumption in the last budget was certainly too large but a municipality has no way of knowing what their true budget numbers will be before the business license numbers and, yes, even the sales tax numbers are seen by February or March of the budget cycle year.

The only thing the Mayor can do without the City Council agreeing is layoffs.

I would agree to a voluntary 10% pay reduction to keep anyone from being laid off. If the employees would agree to a voluntary pay reduction it would not have to be approved by the City Council.

I (recall) several layoffs (in other area municipalities) and this can be devastating to not only the employees that are laid off but also the ones that remain."
-- PBC,
public worker

"I have been a contributing member of this community for over thirty years. Mobile is a wonderful place to live and work and I am thankful for that.

I now voice my concern about the proposed sales tax increase. I am in the retail furniture business. As with everyone else the recent downturn in the economy has negatively affected my sales. I have trimmed and trimmed my budgets in order to avoid lay-offs. There
are many weeks that I don't take home a paycheck so employees can keep working. I fear that a sales tax increase will negatively affect my sales and the sales of every other retailer in the city of Mobile. As it is, we daily compete with Internet sales whose vendors don't charge sales tax even though they are required to do so by the city of Mobile. We also compete with Baldwin County, Mississippi and Florida retailers whose sales tax is lower. If you would just collect the sales tax that you require from these out of city sales you would have more than enough money to balance your budget.

I realize that money is tight and the economy is not good, but please don't bite the hand that feeds you. If you increase the sales tax and sales suffer you will not collect as much as you propose to collect. Also, I, like every other Mobile retailer will need to cut jobs, and many businesses could be forced to close.

I know that the city of Mobile needs money but I hope you realize that a sales tax increase will negatively affect all of the citizens of Mobile. If the sales tax goes up we will all be forced to curb our spending even further.

I hope the city will consider other alternatives. A sales
tax is definitely not the answer to our problem. If it passes, spending will be curtailed so that less tax will be collected and you will see many Mobile retailers going out of business which in turn will cause our unemployment rate to go even higher than it is."
-- MLB,
retailer

"In my opinion Jones and the four council members that want the tax increase are off target. I am sure they knew this situation was looming, but it seems they waited until the last minute to react.

The tax increase would be extremely harmful to small business in Mobile. It would do nothing but drive more business to the Internet or out of town, i.e.: Pensacola tax is 7.5%.

I really think they are looking for the easy way out.

One example of something that could be done is the following: The governor on Montana asked the people of his state what they should do -- what a novel idea! -- to resolve their deficit problems and he received some very good suggestions, ones that they implemented.

One they spoke about were the state cars. They felt they had too many so they cut back, much like our situation right now. What they did was, if someone needs a car and it was not available that person used their own car and was paid mileage -- what a cost saver. I do not see any reason city cars should be taken home, as far as I can tell this is just one more expense we could live without. Oh, by the way, they asked the governor about raising taxes and he said that option was NOT even on the table.

The fire and police are taking the attitude of all or nothing. I have been in their shoes I worked for (a large clothing) manufacturer for 19 years and was laid off; try to replace that salary in Mobile, so I know how that feels. Unfortunately, I don’t agree with that attitude, and this is not their fault; the fault lies at the feet of the mayor.

The mayor was elected to make the hard, sometimes unpopular decisions, and this is one of them. It is not fun but it is his responsibility.

I know if they were to sit down think this through long and short term and even get some input from the people I know this situation can be resolved."
-- SRG,
retail sales

"I still advocate a one cent temporary (sales tax) increase from May 1 through September 30. I am still surprised how the Mayor has averted controversy or accountability."
-- FCP,
construction

"I think a combination (of revenue enhancing measures and spending cuts) is the most viable option. I hate to say it, but increased property tax is the most viable long term solution."
-- VMM,
homebuilder

"Off the mark. A 1% sales tax increase will not create a consequence for the executive or legislative branch of government or for any city employee. It will only create one for the local economy and the tax payer.

Although it is the most politically prudent thing to do, it is not the best thing to do.

The mayor should offer the council a reorganization plan to reduce cost with his executive staff and other areas of government without lay offs. The council should agree to a reduction in compensation (reduce their expense allowance) to show good faith, pass a 5% pay cut for all city employees, pass a 1/2 % tax increase to expire in two years. This would be more like everybody participating and not just the tax payer."
--RLR,
ex-city official
431-9444
350 Dauphin St.
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