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February 6, 2014

City sales tax revenue continues to improve

Alcohol revenue dips as more area communities offer legal sales

As the local economy continues to rebound, total tax revenues for the City of Cullman increased by 4.86 percent over the past three months — largely led by a boost in sales tax collections.

Total revenue for the first quarter of fiscal year 2014 increased from $6.4 million last year to $6.7 million this year, with an exact increase of $313,630.

Those gains were led by a 6.98 percent, $225,220 increase in sales tax — which officials say is a sign of economic growth — as well as a 14 percent, $138,163 increase in sanitation fees. The sanitation increase was reportedly led by an up-tick in dumpster rentals and fees for construction projects.

Along with the increased revenue, the county’s overall unemployment rate has dropped to 4.8 percent, well below the state average of 6.2 percent, giving Cullman the third-lowest rate in the state.

“These are all good signs of positive growth for our economy,” city council general government committee chair Jenny Folsom said.

Though overall revenue is up, alcohol revenue continues to dip from record highs in the months following the legalization of legal sales within the city. Beer/wine tax, as well as liquor tax, were both down year-to-date. Beer/wine tax dropped 11.85 percent, from $141,523 in 2013 to $124,759 for the same quarter in 2014. Liquor tax almost leveled off compared to last quarter, but dropped less than a percentage point from $73,389 in 2013 to $73,284 this year.

City clerk Wes Moore noted the alcohol declines were expected, adding this will be the first 12-month cycle officials will have to compare numbers to determine the impact alcohol sales in other Cullman County municipalities like Hanceville and Good Hope will have.

“This will be the first year, so we can get a feel for the impact the other wet cities will have on that,” he said.

Business license fees were also down this quarter when compared to last year, dropping 7.19 percent from $84,273 to $78,210 in the first quarter of 2014. Moore noted those fees are cyclical, and he expects licensing revenue to balance out year-to-year.

“Those should catch back up,” he noted.

Though revenues are up this quarter, expenses have also increased. Expenses jumped $495,725, or 7.91 percent, largely anchored by the $220,000 budgeted purchase of a container truck and recycling truck. City officials also increased the parks department’s allocation by $350,000.

“Those things were budgeted, and we actually have a $195,000 grant coming back to reimburse us for the trucks,” Folsom said.

Trent Moore can be reached by e-mail at trentm@cullmantimes.com, or by telephone at 734-2131, ext. 134.

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