Sales tax for new jail to begin October 1

Published 3:00 am Tuesday, August 29, 2017

Residents can expect to pay a little bit more at the register when they shop and dine in Pike County come October 1.

The Pike County Commission Monday unanimously approved a temporary sales tax that will bring in revenue to fund the construction of a new county jail.

County attorney Allen Jones said that the county will be trying to begin advertising as soon as possible so the funds can begin being generated in October instead of November.

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“The way that works is the tax has to be advertised for 30 days and then the tax will be applied the first day of the following month,” Jones said. “That’s why they went ahead and passed this tonight and not at the next meeting. If they passed it then, it wouldn’t start until November.”

The State Legislature authorized the commission in May to raise the sales tax up to 1.5 percent across Pike County except within the municipal limits of Troy, where the upper limit imposed was 0.5 percent.

The county did just that Monday night, opting not to exempt “big-ticket” sellers such as those who deal in the sales of vehicles and heavy machinery.

Jones had previously told the commission that these entities may have a statute capping sales tax hikes at a lower level, but said Monday he had found that not to be the case.

“There is no law that creates an exemption, preference or cap,” Jones said. “In the past, it is a custom that has been done. That’s because it is an impact on those types of businesses more so than a restaurant or clothing store because you’ve got a $50,000 vehicle, the impact could be so detrimental on the dealer, someone might keep going further south.”

On the other hand, Jones said, choosing not to exempt certain businesses may be the more fair option. “There are all kinds of backs and forths and pros and cons.”

The commission debated briefly whether to take more time to consider the resolution, as this is the first draft put before them. A big sticking point for the commissioners in the conversation was the payment of TCU Consulting Services, a firm the commission just hired for nearly $110,000 to conduct a feasibility study.

Without passing the resolution, county administrator Harry Sanders said the money would have to be borrowed out of the general fund until the tax money came in to reimburse the fund. Sanders said the general fund could support that measure if the commission wanted to wait to act on the resolution.

“I think we need to go ahead and do it,” said Homer Wright, District 1. “We’ve got a contract that we’re fixing to get started.”

Wright made the motion to do so and the rest of the commission lent its support as well.

The sales tax is projected to generate approximately $2.5 million a year. Once the costs are paid off, the tax will expire and no new tax is planned at this time.

The commission also raised court costs by $35 to increase the operation budget for the new jail once it opens. Those costs began being collected in May.