Pelham considering tobacco tax

By NEAL WAGNER / City Editor

Pelham officials soon will ask state Rep. Mike Hill, R-Columbiana, and state Sen. Cam Ward, R-Alabaster, to sponsor legislation to allow the city to establish a new tobacco tax to benefit the Pelham Parks and Recreation Department and senior citizen services.

The Pelham City Council passed the resolution 4-1 as an “exploratory measure” to see if the city can get state approval before further considering the new tax, said Councilwoman Karyl Rice.

Council members Teresa Nichols, Steve Powell, Rice and Council President Mike Dickens voted in favor of asking Hill and Ward to sponsor the legislation during the 2011 regular legislative session. Councilman Bill Meadows voted against the resolution.

If levied in the future, 100 percent of the money raised through the tobacco tax would be placed into an account separate from the city’s general funds and used only to benefit the city’s Parks and Recreation and Senior Citizen Services departments.

Because Alabama law requires a state legislative act to allow cities to levy certain taxes like the tobacco tax, the city will first gauge the state’s reaction before moving any further with the issue, Powell said.

“There is no particular amount set or anything yet,” Powell said. “If the state passes legislation, it will just allow us to move forward with this.

“Right now, I will vote for going forward with requesting the legislation,” Powell added. “But I haven’t seen anything gathered yet on the impact this tax would have or anything.”

Requesting the legislation is the first step toward considering a possible new tax, and legislative approval would allow Pelham to pursue the issue further rather than obligating it to pass the new tax, Powell said.

“(Legislative approval) just sets the stage for us to further explore the issue in the future,” Powell said. “It would allow us to pass the tax, not obligate us to do so.

“From my perspective, this is just the first step to allow this to be explored,” Powell added.

Dickens said he is unsure how the Legislature will react to the request, as the state recently denied a similar request to allow the city to annex certain county properties completely surrounded by Pelham city limits.

“By passing this tonight, we are in no way saying this (new tobacco tax) is going to happen,” Dickens said. “We already had a request similar to this turned down.”

Meadows, while explaining why he voted against the resolution to request legislation, called the tax “anti-business and anti-citizens of Pelham.”

“I’m not in favor of increasing taxes on anything,” Meadows said. “If anything, we should look at lowering taxes for city residents.

“If I did use tobacco, which I don’t, I’d go somewhere else to buy my tobacco if this tax was passed,” Meadows added. “This sends a message that we are not business-friendly. I’m totally against it.”

Nichols said some cities neighboring Pelham already levy tobacco taxes, and have seen benefits from doing so.

“Surrounding cities have these taxes in place, and people come here to purchase tobacco,” Nichols said. “I want us to have the benefits of those other cities.”