Members of the Mobile City Council have been invited to speak to the National League of Cities about the success of its capital improvement program, or CIP.
The CIP began in fiscal year 2016 and uses a three-year extension of a roughly 20 percent sales tax increase to make infrastructure improvements. The roughly $30 million in funds each year are split between citywide projects and each of the seven council districts. Councilors have since been reaching out to residents to glean how best to use the $3 million each district receives per year.
The NLC was looking for cities that have found innovative ways to fund capital projects. Council Vice President Fred Richardson nominated Mobile’s CIP program and it was selected. Richardson, Council President Gina Gregory and Councilman Levon Manzie were selected to speak at the upcoming NLC CIty Summit in Charlotte, North Carolina, in November as a result.
The trio will be speaking as part of a workshop called “The Case for Collaboration: Tackling the Infrastructure Backlog.”
Manzie called it an “honor” to share with other cities around the country the success of Mobile’s CIP program.
“I think it’s awesome,” he said. “To be thought of in this category is a plus for this city. It shows how progressive this council and the administration has been in transforming the city.”
The CIP initially began to help work through the city’s $200 million backlog in infrastructure projects. While work has begun, many projects are still pending and the CIP is set to end in 2018. Several councilors have considered extending the sales tax increase, or making it permanent to continue the program indefinitely.
Gregory said the program is certainly something that is on the mind of all of the councilors, but some source of funding will have to be found in order to continue it.
RIchardson has come out in favor of making the tax increase permanent, maintaining a penny addition on the sales tax.
“I know what the problems are,” he said. “I’m not guessing. I just need the funding.”
If the program were made permanent, Richardson said, he would secure bonds on other projects and pay off debt to get even more done.
Other councilors said they’d be in favor of extending the tax increase to get more capital projects completed.
“I don’t think that anybody would argue against it,” Councilman John Williams said, adding the tax increase has actually lessened the tax burden on residents. The city can get through the backlog of projects before the prices for materials increase, he said. It also prevents the city from taking on new debt.
“If we just ran out there and borrowed again, we’d be chasing our tail,” Williams said. “I think we’re on a great path to be one of those cities that people are going to start visiting us and ask ‘how’d you do that?’ I really believe that.”
Councilman C.J. Small said he supports extending the tax increase “100 percent.” He said he’s heard no opposition to it from residents of District 3.
“The residents can see the work being done across the district, from sidewalk improvements to parks to the revitalization of streets,” he said. “It has been a great success. Without the CIP, Mobile would be further behind in infrastructure needs.”
Councilman Joel Daves, chairman of the body’s finance committee, said he’s in favor of extending the tax increase another five years before letting it sunset. Extending the CIP program for five years would allow for a longer planning period for projects in the future, he said.
“Three years is a little too short once we got into it and saw how it worked,” Daves said. “It’s better to have a five-year plan, where you can take on bigger projects over an extended period of time if you have a five-year horizon. That’s one reason to extend it.”
Putting a sunset on the tax increase makes the council accountable to residents. It would help prevent the funds being wasted, he said.
“They have the ability to lobby, you know, if the money starts getting wasted,” Daves said. “They have the ability in five years to lobby their councilperson in five years to not have it renewed.”
Manzie said he’s in favor of an extension of the sales tax increase.
“Until we can build consensus around another source of funding, I’m in favor of extending it,” Manzie said. “Other things need to be done.”
Councilwoman Bess Rich supports a different form of revenue. She chaired an ad hoc committee on taxation that looked at a possible property tax increase. The group wrote a report on its findings, but talks have gone nowhere to this point.
“The sales tax is regressive and not business friendly,” Rich said. “So, right out the chute, a way to replace it is very important.”
Rich added that the sales tax increase is not sustainable and revenues from it are affected by internet shoppers and people choosing to buy products elsewhere.
“The 10 percent sales tax, one of the highest in the nation, just is not the tool to sustain what you need to do to operate,” she said. “Everyone understands that it costs money to operate, or to maintain, or to create new. So, we have to look at other resources that are out there and other means of getting that done.”
Instead, Rich would like to model an infrastructure improvement program in a similar fashion to the county’s pay-as-you-go program. It would allow city residents to vote, via a referendum, on projects they feel are important to the community.
“It’s a much more sustainable and business friendly way to do business, to achieve your desires and needs,” she said.