Walker County faces bankruptcy if 1 cent sales tax increase doesn't pass, officials say

(AP Photo/David Goldman)

If a 1 cent sales tax increase doesn't pass on Tuesday, Walker County officials said the county will be forced to prepare for bankruptcy.

The county is struggling to pay its bills, including debt incurred by the county commission in 2002, and to fund services such as the law enforcement and volunteer fire departments, county officials said during a Sunday afternoon Facebook Live event sponsored by the Daily Mountain Eagle newspaper.

The 1 cent sale tax is expected to generate at least $7 million in additional revenue each year, said Eddie Jackson, attorney for the Walker County Commission.

"If we are really lucky, it will bring in even more," he said.

The 1 cent sales and use tax referendum is on the ballot in Walker County on Tuesday along with the special primary election for U.S. Senate.

Jackson said the county has only three ways to raise money: from taxes and fees, state and federal governments and to borrow money.

"Property taxes haven't kept up with the cost of inflation and the cost to run things," he said, adding that the assessed value of property in Walker County has gone down. "It is being outstripped at a huge rate."

Jackson said in 2002, the county commission couldn't pay its bills and instead of raising taxes, the body obtained a loan and deferred payment on the principal and payments for 10 years.

"Borrowing is out of the question now," he said.

Jackson said the county does currently have a 2 percent sales tax, but that goes almost exclusively to the Walker County Board of Education.

Earlier this year, at the request of the Walker County Commission, the Alabama Legislature passed a law allowing the 1 cent sales increase to be brought to a referendum.

The law earmarks where the additional revenue from the tax can be spent. The first priority will be $1.5 million payments each year for the next 15 years to pay off the county's outstanding debts.

"We will default if this tax doesn't pass," said Jerry Bishop, chairman of the Walker County Commission, who was elected to office last year.

He said when he ran for office, he told residents that the county would need more revenue.

County Commissioner Keith Davis also asked for residents to support the sales tax increase.

"We need your help on Tuesday to continue to help improve this county and do the things that are needed for my kids and your kids and your family and my family to make us continue to be successful," he said.

According to the law, $500,000 will be allocated each year to public safety uses, including security at the courthouse and law enforcement. A sum of $200,000 will be divided between the county's 26 volunteer fire departments and two rescue squads.  Another $100,000 will go towards the promotion of economic development in the county.

About $4.4 million will go towards repairing Walker County's roads, bridges and other infrastructure.

The law also repeals a $10 issuance fee for vehicle and boat registration.

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