South Charleston Council has given final approval to a 1 percent municipal sales tax.
The tax is expected to take effect on July 1. It will raise an estimated $4.3 million annually. Mayor Frank Mullens has said the revenue will help South Charleston meet its pension obligations, pay for infrastructure improvements and help the city keep its wages competitive.
Council approved the tax Thursday evening by a 7-2 roll-call vote.
Voting for the tax were Ward 7 Councilman Jamie Sibold, Ward 2 Councilman Mark Wolford, Ward 8 Councilman Don Ryan, Ward 6 Councilman Bob Lilly, Ward 1 Councilman Kent Rymer, Ward 3 Councilwoman Kathleen Walker and Mayor Frank Mullens.
Voting against the tax were Ward 5 Councilman Edd Brooks and Ward 4 Councilman Jeffrey Williamson.
The sales tax is possible because South Charleston was accepted into the state's Municipal Home Rule Pilot Program in October 2014. The program gives cities more control over their own affairs.
The tax will be accompanied by an annual reduction of $366,263 in the city business and occupation tax paid by utilities and the elimination of the city's amusement tax, which brings in $3,200 annually.
City leaders expect the utilities to pass the business and occupation tax reduction on to their customers. The home rule program requires cities that impose a sales tax to reduce business and occupation taxes.
Council voted on the tax after hearing from two speakers during a public hearing.
Rodney Jones of 2912 Macon St. claimed that most of the business and occupation tax reduction will go to large entities like Gestamp, Dow Chemical Co., and Thomas Memorial Hospital.
Jones said large entities should be considered separately and "this vote should be delayed until a reasonable discount can be given to the citizens."
In addition, a special account is supposed to have the money needed for police and firefighters who are already retired so the sales tax shouldn't be needed to fund them, Jones said.
"That's something that should be reviewed," he said.
Jones also said it has been reported that the tax is needed so the city can afford to pay the state minimum wage when it increases from $7.25 to $8 an hour on Jan. 1.
Jones said he couldn't find out how many city employees are paid the minimum wage - "I got stonewalled" - but "I found out from another public official that no one in South Charleston (city government) makes that wage."
"One final thing," Jones said. "I want to mention we have an excessive amount of unnecessary spending on beautification projects."
He cited recent improvements at the city park on Glendale Avenue, which he claimed "nobody wants."
Assistant Fire Chief Virgil White, flanked by other firefighters, said he was speaking on behalf of the Fire Department when he thanked Mayor Mullens, council members and City attorney Michael Moore "for pushing this through, to take care of infrastructure and take care of the employees."
He said the tax will help fund pensions for uniformed employees who already are retired as well as those who retire in the future.
In addition, White said he likes the city's beautification projects.
"It helps attract people," he said.
Following the vote, Mullens said council's decision to impose the tax "was a very responsible thing for this city, moving forward."
"I believe it solidifies the city's finances for the next eight years," Mullens said. "Just about everything we touch will be better. Trust me."
The city sales tax will be collected by the state Tax Department. Moore said he expects to submit all of the necessary paperwork to the state tax commissioner by next Wednesday.
City Manager Rick Atkinson has said that "probably 75 percent" of South Charleston's sales tax will be paid by non-residents who shop at Wal-Mart and other South Charleston stores. Mullens has said that is fair because the shoppers use the city's infrastructure and services.
The city's current annual budget is $21.7 million. The business and occupation tax is the largest revenue source, raising $10.8 million annually.
Twenty-eight municipalities are participating in the municipal home rule program, which was created by the Legislature in 2007. South Charleston is the latest on a growing list of home-rule communities that have imposed a sales tax.
Charleston began collecting a half-percent sales tax in October 2013 to pay for renovations to the city's Civic Center. Charleston raised its tax to 1 percent in November 2014. The additional revenue is being used to help fund the city's police and fire pensions.
Also at Thursday evening's meeting, Public Works Director Gerald Burgy said regular trash pickups will occur next Monday and Tuesday. There will be curbside pickups only on Wednesday and Thursday. Residents can drop off holiday boxes and wrappings on Friday and Saturday at a truck stationed at the city garage on Jefferson Road.
In addition, Burgy announced the city has received a $91,000 state grant to buy another truck for recycling.
South Charleston Council's next meeting will be at 7:30 p.m. Jan. 7 on the second floor of City Hall on D Street.