MOBILE, Alabama ? Sales taxes continue to stagnate nationally and in Mobile, but the city's finance director said today that the city is in much better shape this year than last year when a $27 million budget deficit threatened public services.
Barbara Malkove, who oversees the city's finance department, told the City Council that the sales tax revenues ? the largest revenue source funding city services ? were overbudgeted by $1 million for the last six months and were $2.3 million better than last year. The figures this year, however, include the city's penny sales tax increase approved by the City Council in October.
"We were in a much worse position last year," Malkove said.
But some councilors said they need more information and requested Malkove and the city's administration to provide more detailed accounting of the latest budget figures during a finance committee meeting in the coming weeks. No date has been set for that meeting.
Malkove said audited figures should be available at the end of the month.
"The projection that I heard is far short of where we were suspecting it," Councilman William Carroll said.
Councilwoman Bess Rich said she is concerned about the city's financial position, saying that sales tax revenue is slumping despite the tax increase and questioned why the city's administration is not taking a more aggressive approach if a possible budget deficit situation looms.
"It was projected that it would add this to our treasurer by adding another penny, and it's not doing it," Rich said.
Malkove's latest report comes after a February update that in which she said sales taxes were down during the holiday season compared to a year ago.
In January, she cited a concern about people shopping online more detracting from purchases at local retailers.
The Mobile City Council approved on Oct. 2 a penny sales tax increase from 4 cents on the dollar to 5 cents, with an expiration date set for July 31, 2015. The increase makes Mobile's total sales tax rate in the city, including state and county levies, to 10 cents on every $1 spent.
The tax was originally increased to attract additional revenue into the city.
The increase allowed for the allocation of 25 percent equally into four funds: the city's general fund, escrow account, economic development and capital improvement funds.
The entire extra revenue generated from the sales tax rate increase is supposed to be $25 million. Part of the increase went toward a $5.1 million lease agreement approved Dec. 4 to purchase new police, fire and public works vehicles.John Sharp, Press Register