Senate committee passes bill to regulate future occupational taxes

Senate committee passes bill to regulate future occupational taxes
Members of the Montgomery city council have been meeting in a committee to discuss a proposed occupational tax. (Source: WSFA 12 News)

MONTGOMERY, Ala. (WSFA) - A bill that would stall Montgomery’s efforts to implement an occupational tax has passed in a state Senate committee.

The bill passed 8 to 2. It will now go to the full Senate for a vote. It passed the House last week.

The bill would require the legislature vote on occupational taxes. Supporters say the legislation would provide an extra layer of protection for workers who would pay the tax. The argument is employees already spend money in the cities where they work and contribute to the local tax base.

“It gives people outside of a municipality a voice," said Rep. Chris Sells.

Opponents say the legislation would take away the ability of local leaders to fund and run the city’s government.

“We should be about working with local governments," said Sen. Linda Coleman-Madison. "We should not be about tying their hands.”

On Tuesday, mayors of Alabama’s 10 biggest cities issued an open letter about the bill. It says, in part:

“Without strong cities and towns, it is impossible to have a vibrant Alabama. 65% of Alabama residents live in municipalities; 25% in our ten largest cities alone. These communities are led by mayors and councils who were elected to move their cities forward, to identify problems and challenges and then search for and implement the best solutions. HB147 denies duly elected municipal officials the full ability to do their jobs.”

Mayor Steven Reed spoke about the bill and about Montgomery’s efforts to implement an occupational tax. Reed said the city has very modest revenue and they have been looking at ways to bring in more.

“It’s not a situation where we’re trying to overtax anyone,” Reed said.

Reed also said local control is vital to cities and their citizens, and lawmakers are not held responsible for local residents.

“I think sometimes in the legislative body they don’t understand the executive decisions that we have to make," he said. "We have our own body and our city councilmen and women who are elected to represent the districts, and they know the needs of their districts.”

Tuesday evening, the Montgomery City Council voted to adopt an ordinance implementing the Montgomery Occupational License Code. The council voted 5 to 3 in favor of the new tax. The tax will impact everyone who works in the city, including Montgomery residents.

If the legislature’s bill passes, it could repeal Montgomery’s new tax.

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