Oh no! Homewood, Vestavia, & now Hoover

CostcoMy wife and I are a Costco family

We shop Costco every week, eat free snacks, and look forward to chance meetings with friends—many we haven’t seen in years.

We buy food, eye glasses, clothing, computers, televisions, tires—our house is stocked with Costco products.

But on October 1st, something bad happened at Costco.

Costco is located in Hoover and Hoover increased its sales tax.

Suddenly, Costco, the company that tries to keep prices low—had a price increase.

Of course Costco wasn’t at fault—Hoover increased taxes at the Galleria, at Patton Creek, at every restaurant, grocery, and retail store in the city.

There’s nothing shocking about Hoover’s sales tax increase–both Homewood and Vestavia Hills recently upped their sales taxes. In fact, Hoover’s sales tax increase was more moderate than its neighbors— ½% vs. 1% for Homewood and Vestavia Hills.

Are we okay with increased taxes?

Alabama is supposed to be a state where we hate taxes, but when sales taxes are increased there appears to be very little push back.

Hoover brags it hasn’t had a sales tax increase in almost a quarter of a century.

But why should we ever have a sales tax increase?

Companies increase prices and blame it on inflation.  Inflation is not the problem with sales tax. In fact, inflation causes sales tax to go up automatically. A sales tax increase is just an additional tax on top of an inflated sales tax.

Alabama is a sales tax nightmare

According to USA Today, Alabama has the highest local tax rate in America—states like Delaware, Montana, New Hampshire, and Oregon have no sales tax at all.

And Alabama, its counties, and municipalities fully tax groceries–one of only seven states to do so.

There are other options than tax

I strongly feel we’ve reached the upper limit on how much sales tax is acceptable.

Would you be happy to pay 11 or 12%?

Instead of competing with one another, our city and county governments should sit down like adults and find ways to share services.

With 35 municipalities, we have 53 fire departments, 24 police departments, and a sheriff’s department. The Jeffco sheriff’s department alone has a budget of almost $66 million in addition to the 24 independent police departments.

Garbage trucks—each hired by a different city—pass one other every week in the same neighborhoods.

We have 13 independent emergency call centers in Jefferson County. Vestavia Hills has saved $3.7 million since it outsourced its call center five years ago.

And our cities have spent at least $200 million in the past 20 years stealing businesses away from one another.

This is a head scratcher

As I wrote earlier, Alabama is one of only seven states that fully tax groceries.

Hoover Mayor Frank Brocato told me when Hoover was evaluating a sales tax increase; he was going to recommend eliminating sales tax on groceries. He said he was told by his legal department that the state would not allow it.

Next time you buy groceries, pay your check at a restaurant, or make a purchase at a retail store, take a look at how much you pay in sales tax.

Tell your elected officials that enough is enough.

Let’s turn Birmingham around.  Click here to sign up for our newsletter. There’s power in numbers. (Opt out at any time)

David Sher is Co-Founder of AmSher Compassionate Collections.  He’s past Chairman of the Birmingham Regional Chamber of Commerce (BBA), Operation New Birmingham (REV Birmingham), and the City Action Partnership (CAP).

Invite David to speak to your group about a better Birmingham. dsher@amsher.com

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18 thoughts on “Oh no! Homewood, Vestavia, & now Hoover”

  1. Thanks to the 1901 Constitution the only tax that local communities can raise without approval from Montgomery s the sales tax.

  2. Problem is, Alabama is the only state that funds its Education Trust Fund through sales tax. The only way to have decent schools is to raise sales tax and raise local property tax. And so few communities ever approve a property tax increase, which must be voted on by the people. While a sales tax increase can be approved by a city council.

    1. Property tax might not be answer. Seems everything is raise property tax. First might want to survey and see how many are over age limit and no longer pay property tax. Second those on disability do not pay property tax. Which leaves rest holding bag. Reason #1 why State should have lottery.

    2. The only way to have decent schools is to break the monopoly on “education” we have given to government. Try vouchers. They can’t be worse and even worked quit well after World War II with the GI Bill.

    3. The only way to have decent schools is to terminate government’s monopoly on education with vouchers. They worked after World War II with the GI Bill and they couldn’t be worse than what we have. No one would even consider being forced to buy their groceries at the neighborhood store, but we allow our children to be forced to get their “education” at the neighborhood “school.”

  3. Bring in he lottery to subsidize the education crisis, legalize marijuana (medical use only), either that or be taxed to death by the local gov’t. Besides, there are real medical benefits to marijuana with and without THC, but many small minds cannot get past the moniker put on my paid scientists to claim there is no benefit. As far as the lottery, I will never know why. Alabama and Utah are the only 2 states in the country without a lottery.

    1. I’m with you on all these points! Hopefully more people will be mobilized to vote and build momentum towards making some policy changes.

  4. I noticed the Hoover Tax on my cellphone bill, also the $7.00 they charge for using 911…. this has got to stop.

  5. Supporting Cosco over small local businesses is a real problem as well. Look at all the businesses displaced by the things you mentioned that you purchase there, David.

    1. Debra, You are so right! Being a local business owner I certainly understand. However, the Costco business model is just too strong. Our family saves hundreds of dollars a year shopping there and Costco will take back merchandise with no questions asked. In addition, they send us large cash incentives every year. Your point, however, is well taken.

  6. It is usually the over-abundant schools systems that cause these municipalities to raise taxes. Also remember that “fees” are taxes, just with a different name. As long as governments can raise taxes with little input from the tax payers, there will be no effort to eliminate waste and control spending.

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