Birmingham Economic and Community Revitalization Ordinance

The Birmingham Economic and Community Revitalization Ordinance is a proposal by newly-elected mayor Larry Langford to double business license fees and impose an additional 1% sales tax in order to fund a $500 million bond issue for numerous capital initiatives.

Background

Langford's campaign motto was Let's Do Something! and, soon after the results of his outright election were certified, he began discussing specific new programs. Among the projects he campaigned on were construction of a domed stadium, improved mass transit, cleaning up neighborhoods, reducing crime, and improving Birmingham City Schools. When asked how he would pay for such a full slate of programs, he responded that "nothing is free." He promised to have a proposal for financing the domed stadium and transit improvements within 30 days of taking office.

Summary

A summary of the proposal was given to the Council on November 15, 2007. It consisted of a 1-page description accompanied by a Birmingham News column by Eddie Lard, a Time magazine article about the "One Laptop Per Child" program, and a breakdown of municipal sales tax collections in Jefferson County. The proposal was distributed to the Council members in sealed envelopes stamped "Personal and Confidential. Not for Distributions. Only Mayor May Comment on Contents." Langford requested that the Councilors return their individual comments to him before he made the proposal public on Monday November 19.

The basics of the proposal were quickly leaked to the Birmingham News, prompting an angry outburst from Langford over the weekend. The News made a formal request for copies of all documents, citing Alabama's "Sunshine Laws". Council president Carole Smitherman sought the opinion of the Council's legal advisor, J. Richmond Pearson, before responding. His opinion was that the proposal was, in fact, a public record. A copy was then provided to the News and published on al.com.

Langford requested a formal vote on the proposal on November 27, but most members of the council said that such a major ordinance would need much more detail and more public input before it could be adopted.

Proposal

Langford's proposed ordinance was distributed in the form of a one-page summary, which began with Langford's familiar motto, "Birmingham voters know if you always do what you've always done, you'll always get what you've always gotten."

Business license fees

The first revenue proposal is a 100% increase in business license fees, which he estimated would generate $36 million in revenue. $17 million of this would be used to match Federal grants to create $25 million in recurring funding. The remaining $19 million would finance a $500 million bond issue to finance construction of a "Dome Stadium". The estimated economic impact of transit improvements given by the Mayor is $42.5 million per year. The stadium would be expected to provide a $1.25 billion economic impact over the life of the project. The total economic impact (over 20 years) was estimated at $2.06 billion for the $36 million investment.

Sales tax increase

The second revenue proposal is a 1% increase in sales and use taxes, scheduled to be retired after 6 years, which, it was estimated, would raise another $36 million. $6 million would be earmarked for college scholarships for Birmingham students. $5 million would be used to supplement the annual budget for the Birmingham Police Department and Birmingham Fire & Rescue Service, covering the purchase of new computers, cars, and uniforms. $10 million would be put into an economic development fund, and $15 million would be used to improve maintenance of streets and sidewalks. Of that $15 million, $9 million would be split equally among the nine City Council districts, to be directed by individual Council members. Langford estimates that the streets and sidewalks fund would return $37.5 million in economic impact while the economic development fund would have a $25 million direct impact. The scholarship program is shown as providing an "immeasurable" economic impact, but if you accept a total impact of $100 million for that part of the proposal, then another $37.5 million in economic impact has been factored in from the scholarship program.

Together, both proposals would generate $72 million in public revenues and commit $72 million in public expenditures, preserving a balanced budget. The combined economic impact at the bottom of the page is given as $1.355 billion ("based on a multiplier of 2.5").

Later versions

Since the distribution of the first summary, Langford provided additional information and changes to the Council. In two revisions to the first summary, the projected increase in revenues from business licenses was reduced to $28 million, with the shortfall taken out of the amount that would have been directed toward transit improvements. The revised economic impact of that part of the proposal was amended to $1.29 billion, down from $2.06 billion, over the life of the project. Similarly the amount of projected economic impact from the sales tax increase was changed from $100 million to $62.5 million.

When pressed for other details about how the revenues would be allocated, Langford assured the Council that the details would be worked out later and that it was critical to implement the funding source in order to plan operations. At various times Langford has indicated that the domed stadium would be built outside of the authority of the Birmingham-Jefferson Civic Center Authority and that transit spending would be handled by a new authority rather than the existing Birmingham Jefferson County Transit Authority. However, he has also met with those groups, leaving the possibility of working with them open.

References

• Archibald, John (November 19, 2007) "Council provides documentation of tax plan." Birmingham News.
• Bryant, Joseph D. (November 17, 2007) "Birmingham City Council members say tax increase vote won't happen on Mayor Larry Langford's deadline." Birmingham News.
• Hansen, Jeff (November 17, 2007) "Birmingham News requests release of documents detailing Mayor Larry Langford's proposed tax increase to fund dome, other projects." Birmingham News.
• Bryant, Joseph D. (November 16, 2007) "Birmingham Mayor Larry Langford wants to boost sales tax by a penny, to 10 cents total, plus double business license fees to help build domed stadium, improve mass transit, fire and police departments." Birmingham News.
• Whitmire, Kyle (November 20, 2007) "The Secret Plan: Leak leaves Langford in the lurch." Birmingham Weekly. Vol. 11, No. 13.
• Wyatt, Johnnie (November 29, 2007) "The Westside Story" Birmingham Times.
• Whitmire, Kyle (November 29, 2007) "War on Dumb: Leapin' Larry's counting coup". Birmingham Weekly. Vol. 11, No. 14

External links

• Scan of Langford's 1-page proposal at The Terminal.