Mayor considers sales tax rate reduction - WSFA.com: News Weather and Sports for Montgomery, AL.

It would be a major change.  The City of Montgomery--examining ways to reduce the city's sales tax.

At $0.10 cents on the dollar, Montgomery's sales tax is among the highest in the state.

Mayor Todd Strange says he'd like to lower it, but to do that, he's has to find a way to make up that revenue somewhere else.

Strange says the economy's instability over the last few years sparked the need to look at reforming Montgomery's sales tax rate.

Why? 40% of the money the city uses to provide services like fire, police and sanitation comes from sales tax revenue.

"To take a $14-million dollar hit in a couple of year period--that really does impact the stability of being able to continue on a level basis to fund your fire and fund your police and fund your road programs."

Strange says experts are looking at ideas to re-coup money the city would lose if leaders slashed the sales tax rate.

Reducing the rate from 10% to even 9% would mean a loss of $26-million dollars in revenue.

"We really are looking at a global tax reform but at the same time making sure that we can continue to have $26, $27 million that we would be reducing," says Strange.

The Mayor has two goals: reduce the tax rate to either 8.5% or 9% and make sure the overall tax structure decreases the burden on residents.

"It's important because 10% is high and 8.5% would be better," says Montgomery resident Joe Bell.

There are a few options.

"Your business license fee, your personal income tax, the ad valorem taxes, taxing people that work in your community," says Strange.

Nothing is set in stone and the Mayor admits there is no time table for this decision.

One thing is for sure, Bell believes lowering the tax rate would help him.

"Spend a little bit more of my money because I'm a little tight with it right now."

Mayor Strange says experts are looking at how other cities have lowered their tax rates and still made up the difference in revenue.

In an unrelated phone poll conducted by the Montgomery Area Chamber of Commerce, Strange says 2/3 of residents polled believe Montgomery's tax rate should be decreased.

The Mayor says there are no tax increases or decreases in his proposed 2013 budget.

He says this decision might not be made for a couple years.

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