Dothan’s Sales Tax Revenue up in 2006, but need for new Hike Still Strong

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The city of Dothan's sales tax revenue has been steadily rising for almost 15 years. But even though those increases have yielded millions of dollars in revenue each year, city officials say another penny to every dollar is still a must.

2006 was a good year for the City of Dothan, in terms of sales tax revenue. The city raked in six percent more sales tax, than it did back in 2005, amounting to millions of dollars in additional revenue.

Angela Palmer, the city’s finance director says, "Roughly it was $2.7 million that we received in 2006 over 2005, and that is about a 6.6 percent increase from 2005 to 2006."

One reason for the increase in sales tax revenue is that the 2006 year saw new businesses and industry's move to the City of Dothan, and city officials say that with so many more places for people to eat and shop, more people are spending money.

Officials also say the steady increase in spending has been a noticeable trend for the past decade. But despite the almost $3 million in sales tax revenue, city officials say they are having trouble improving the quality of life in Dothan, because they are still having to pay off projects they invested in years ago.

“The city issued some debt in the mid 90's and we built three elementary schools... all of those things are being paid off as the bonds are becoming due from the funding that has been generated partially by the sales tax," said Dothan’s City Manager, Mike West.

But with additional sales tax money, city leaders say they will be able to pay these projects off, start new ones, and still be able to finance Dothan's operational costs."

Some of the projects the city plans to invest money in include various road improvement projects, the replacement of many of the city's vehicles, and funding for the city’s school system.

The one cent sales tax increase took effect yesterday, and city officials say the hike will result in almost $12 million in additional revenue every year.