There were two unrelated, but inseparable, news items from Madison County this week.  First, the number of people expected to move into the area as a result of BRAC has been revised down.  Officials currently estimate that only 30% of people whose jobs move will follow their jobs to north Alabama.  Local officials previously estimated that up to 60% of those individuals would make the move.  Foolish enthusiasm?

You might recall that the threat of an influx of transferees was the impetus behind a proposed county wide half cent sales tax increase in Madison County.  The move was blocked by four county commissioners who opposed the increase - two out of principle and two because they seem to be holding out until they get that they want.  Well, sales tax revenue in Huntsville has seen an unexpected surge in the first four months of the budget year.

Figures released Thursday by the city finance office show that collections for the first four months of the budget year are up 10.8 percent over the same period a year ago.

October through January collections totaled $43.3 million, about $2.1 million more than expected. Sales and use taxes for the same period last year raised $39.1 million.

One might initially say that this has no bearing on the county issue, but it does.  Just over 75% of all sales in Madison County take place in Huntsville.  There is already a half cent county wide tax in place that is earmarked for education.  Despite funding over 75% of the revenue that tax generates the city only receives less than 50% of that revenue.  Madison County receives well over 30% of that revenue source and Madison city gets the balance.  So, an increase in sales within Huntsville translates into an increase in education revenue for all three county school systems, although Madison County receives a disproportionate share.

So, we have fewer transferees coupled with an increase in tax revenue from existing sources.  The undergirding for that sales tax increase seems to be eroding.

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This entry was posted by Brian on Sunday, February 25th, 2007 at 12:10 pm and is filed under Madison County, Taxes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site. Please note the copyright policy.