Pelham, Vestavia Hills, Mountain Brook flimsy excuse to raise taxes

Pelham Civic Center
Pelham Civic Complex

By David Sher

I don’t get the logic.

I read the headlines and excuses, but they make no sense.

Read this recent headline.

Pelham raises sales tax for the first time since 2013

Or this comment by a Vestavia Hill’s spokesperson after a proposed property tax increase recently failed:

“The ‘1Rebel 1 Future’ plan would have raised taxes by 9.8 mills and would have been the first increase in the school tax rate since 1990 had the measure been approved.”

Or Mountain Brook’s sales pitch to justify its property tax increase in 2019:

“The last property tax increase in Mountain Brook was in 1991.”

Why is it necessary to increase the sales and property tax rates every few years?

Has no one heard of inflation?

It’s true Pelham hasn’t raised its sales tax rate since 2013, but consumer prices have gone up by 31% in the past ten years. Folks in Pelham are paying 31% more in sales taxes for the same goods sold in 2013—and that’s before the new tax increase.

The Pelham sales tax rate was 4%. It’s been increased to 5%. That’s a 25% increase in city sales tax in addition to the 31% increase due to inflation. The result is the folks in Pelham will now be paying 56% more in sales taxes than ten years ago for the same goods.

The last time Vestavia Hills increased property taxes was 1990, but housing prices have gone up 147%.

The last time Mountain Brook increased property taxes was 1991. Housing prices have gone up 143%.

I want to make it clear, I’m not against folks voting for tax increases. Public education is a top priority in Mountain Brook and its citizens are willing to spend whatever it takes to give their children the finest education that money can buy.

Good for Mountain Brook! But Mountain Brook had a specific reason to raise its property tax rates.

Keep in mind, however, that a home valued at $434,000 in 1991 when Mountain Brook last increased property taxes is now valued at $1,031,000. So it’s somewhat disingenuous to try to sell a tax increase by proclaiming tax rates haven’t been increased in eighteen  years when property taxes had more than doubled.

Alabama and its municipalities’ sales taxes are exorbitant

Alabama has the 5th highest sales tax rate  in the U.S.

Two states, South Dakota and New Mexico, actually lowered their sales taxes last year.

Five states have no sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon.

Alabama’s sales tax is 4%. Jefferson County is 1%. Municipalities in Jefferson County charge 4 to 5% to bring the total to as much as 10%.

In defense of Pelham, most Jefferson County municipalities impose  the same 5% sales tax as Pelham’s new rate –bringing the total to 10%. That 10% rate is more than 93% of the counties in the nation.

And according to the Tax Foundation, Birmingham has the 7th highest sales tax rate of any major city in the U.S.

Is there no limit to how much we are willing to pay in sales taxes?

The folks in Arab Alabama pay 12.5% sales tax—the highest in the state.

Is it okay to keep raising sales taxes every few years?

ComebackTown is focused on how our region can collaborate to compete, be more prosperous, and save money.

Jefferson County with its 35 municipalities has 35 mayors, 35 cities councils, 53 fire departments, 23 police departments plus the Jefferson County Sherriff’s Department, 18 jails, and 14 emergency 911 call centers.

Nashville and Jacksonville (who have metropolitan governments) don’t have dozens of duplicate facilities and bureaucracies.

I believe we have reached our sales tax limit.

Next time our political leaders tell us they want another sales tax increase because we haven’t had an increase in years, we must demand they find a way to work together to eliminate the insane amount of duplication.

David Sher is the founder and publisher of ComebackTown.  He’s past Chairman of the Birmingham Regional Chamber of Commerce (BBA), Operation New Birmingham (REV Birmingham), and the City Action Partnership (CAP).

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Invite David to speak for free to your group about how we can have a more prosperous metro Birmingham. dsher@amsher.com.

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14 thoughts on “Pelham, Vestavia Hills, Mountain Brook flimsy excuse to raise taxes”

  1. David makes some very good points about these property tax increases the cities mentioned!
    If they want to pay more in property taxes to support public education and local infrastructure needs go for it. It is odd to say “we have not increased our property taxes since 19xx!”
    Let the people vote!!!

  2. A major drawback to sales taxes is their regressive nature, i.e., the greater impact on low-income families, especially since groceries are only now being phased out.

    Sales taxes are also volatile and decline in an economic downturn—just when more tax funds are needed. Property taxes are more equitable and stable, especially with provisions for low -income families.

    1. Fully agree with Mike! In my view, Alabama’s regressive and unfriendly sales taxes on everything including groceries, medicines and family necessities does not help attract new business and a young and educated workforce to run it. A problem : Alabama must rely on regressive sales taxes to cover the woefully low property tax rates granted to timberland interests and others. A problem: Lack of local control over local needs and aspirations. A problem: Revising Alabama’s laws to get it.

    2. Does Metro Atlanta and the State of Georgia have these similar issues?
      I still find it very odd they have two very progressive United States Senators in 2023 and they still have Confederates in their state legislature? Maybe they have learned that the rest of the world and capitalism are very compatible with racial diversity and differences?
      WOW !!!!!

  3. Metro BHM is the most poorly managed city in the US and it is very sad because it has such great potential. it is so sad because I loved living there but it doesn’t compare to other cities. get it together and don’t be afraid of changing and growing. you could have been a real leader in the country.

    1. Good suggestion Mike Rucker but many of the current members of the gerrymandered Jefferson County Delegation prefer litigation as opposed to equity and growth!

    2. Good suggestion Mike Rucker but many of the current members of the gerrymandered Jefferson County Delegation prefer litigation as opposed to equity and growth! However I am a long time optimistic guy that believes capitalism will continue to move the needle in Metro Birmingham inspite of our history!

  4. I love bham. it’s so sad that you are stuck in the past. You have always had so much potential but refused to change and grow.

    1. What County is Pelham actually located in?
      I suspect they do not perceive themselves as a part of Metro Birmingham! Good to see the Mayor of Pelham sharing with us some of the cash flow issues they are dealing with!

  5. Alabama should increase property taxes for the betterment of the state and use the funds to increase deficiencies such as education. Alabama has one of the lowest property tax rates in the US and the cost of homes is lower than the majority of the other states. I realize this is an unpopular idea but the cost of living in Alabama is much lower than other states and the quality of life is also lower. Take advantage of the low property taxes and increase them to the level of other nearby states and use the income to improve the infrastructure and create jobs.

  6. I am forwarding this response with Mayor Waters’ permission:

    Thanks for sharing the viewpoint. However, I read it and couldn’t disagree more. David Sher knows nothing about the City of Pelham. In my view his observations are a criticism from the cheap seats. Mr. Sher’s opinions are based solely upon the economic conditions that exist today, a viewpoint that is, essentially, about as long as his nose.

    What does he know of the 10 million we will need in 5 years as our matching funds for the FRA flyover grant, a highway infrastructure project that will positively change how traffic flows through our city forever.

    What does he know about Live Nation preparing to vacate the city in a year or so? What does he know about the half-baked contract signed by the former Pelham management that causes us to only own a mere 40 parking spaces at our Civic Complex should Live Nation bug out? Even if we acquire additional parking spaces from Live Nation at fair-market-value, where would Mr. Sher expect us to get the money for this initiative? It’s my guess Mr. Sher knows nothing about how nonviable and useless our Civic Complex would be without adequate parking.

    What does Mr. Sher know about extended ambulance response times in our city? How would Mr. Sher feel about having to wait 45 minutes for an ambulance where he lives? How will we address this service shortfall without adequate funding?

    No, not only does Mr. Sher not know; I suspect he doesn’t much care. All he is looking for is for someone to hit the “like” button.

    The elected leadership and the City Manager of Pelham do not have the luxury of being near sighted. Our unbelievably difficult task is to put the City of Pelham in a position of long-term success without the benefit of a crystal ball. In my view, Mr. Sher’s observations look trivial by comparison.

    Gary Waters
    Mayor of Pelham

    1. Mayor Waters, I understand your anger, but my intent was not to attack Pelham. I’ve been publishing ComebackTown for close to 12 years. ComebackTown is consistent in encouraging governmental agencies to work together for efficiency and to have a more prosperous region. Rather than work together, governmental entities just raise taxes. There are obviously reasons to raise taxes, but the reason shouldn’t be that we haven’t had a tax rate increase since a particular date. Please note I took up for Pelham during the Amphitheatre discussions: https://comebacktown.com/2022/11/01/did-birmingham-backstab-pelham/ No one from Pelham wrote me a note to thank me for my support. I want what is best for our region. I sure don’t believe we should be stealing from one another. The Jefferson County Mayors signed an agreement where they wouldn’t pilfer businesses from one another. https://comebacktown.com/2021/06/08/jeffco-mayors-endorse-agreement-that-is-a-minor-miracle/ Shelby county mayors might consider getting together with Jefferson County mayors to agree not to poach. This has worked amazingly well for Jefferson County municipalities building trust and saving millions of dollars. I don’t envy your job as mayor. The State of Alabama severely limits municipalities’ options to raise revenues. You’ve got a difficult job and you have my respect for taking on such a difficult task. BTW, you are welcome to be a guest columnist on ComebackTown if you have ideas that can make our region better. I welcome your feedback at any time.

    2. Yes indeed we need none partisan citizens like David as he is providing a forum for all ! Keep your powder dry as some of these cities in Shelby County are behaving like the separatists in Jefferson County! How many cities and school systems are there in Shelby County today?

  7. Right on target, David Sher. Can there be a more loyal citizen of Birmingham than you for what you do? I try, but I am nowhere near you for effective action. Keep going, keep succeeding, as more citizens follow this path you have set out.

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