PELL CITY — While Pell City officials look for more revenue from a proposed sales tax increase, officials from other municipalities are hoping the tax increase will send some shoppers their way.

“I don’t think the penny increase will, but I hope it would,” said Talladega Mayor Brian York.

York said he doesn’t believe Pell City’s sales tax increase will send a flood of shoppers to Talladega, which has a 9-percent sales tax charge.

“I don’t think people shopping for day-to-day items will go and shop somewhere else because of the high cost of gas,” York said. “It could be different with large ticket items, items that cost $500-$1,000 or more.”

He said the City of Talladega increased its sales tax in 2003-2004, and the city did not see any negative effects from the one-cent sales tax hike. The city raised its sales tax from 8 to 9-percent.

Pell City is also looking at a one-cent sales tax increase, but from 9-10 percent. The new sales tax will exceed sales taxes charged by municipalities like Mountain Brook, Homewood, Hoover and Vestavia Hills.

If the council approves the tax hike Monday night, Pell City will become one of a handful of cities in the region to tack on a 10-precent sales tax to products sold within the city. Other regional cities which have a 10-percent sales tax charge include Birmingham, Oxford, Lincoln and Leeds.

Oxford increased its sales tax from 8-10 percent in January 2009. The 2-cent tax hike was earmarked, not for the city, but for schools, according to city officials there.

Oxford officials say the city increased its sales tax from 4-5 cents, while the county increased its tax 1-percent, which amounted to a 2-percent sales tax increase for local schools city and county schools.

Pell City currently provides one-percent of its sales tax revenue to the city school system.

Pell City officials say the proposed one-cent sales tax increase will benefit both the city and school system.

Pell City Mayor Hereford said the city’s share of the revenue generated from the new tax hike will go into the general fund.

“Earmarking this money is not appropriate at this time,” Hereford said.

According to the proposed ordinance, the School System would receive half of the revenue generated from the sales tax increase, while the city would receive the other half. After four years, the city would receive all the money generated from the tax.

Hereford said the city needs the additional tax revenue to pay off a $12 million loan the city secure to fix its sewer system problems, its $3 million obligation for a new hospital, and its $8.5 million obligation to the Coosa Valley Water Supply District, which will provide a reliable source of water to the city at a wholesale price.

He also projected huge city deficits for the next four fiscal years, ranging from $800,000-$1.6 million.

Hereford said Thursday those figures were derived by using the total amount of revenue the city received in 2009, and subtracting the annual loan payments the city will pay out for the three projects, the hospital, the water and sewer projects from 2011- 2014.

He said the city will not make any payments on the sewer project loan until next fiscal year. That year, Hereford projected an $800,000 deficit.

In 2012 and 2013, he projected a $1.3 million deficit and in 2014, a $1.6 million deficit.

The Coosa Valley Water Supply District Surface Water Treatment Facility should be in operation sometime in 2012, which is the time the city is required to purchase 750,000 gallons of water per day at a wholesale price.

Lincoln Mayor Lew Watson said his city council approved a sales tax increase in 2008, upping Lincoln’s sales tax to 10 percent.

He said the tax hike will help pay for the city’s new industrial park and award winning recreational park.

“There is a possibility the city could repeal the tax once these projects are paid for,” Watson said.

Watson said he doesn’t think the increase in sales tax across the river in Pell City will have any impact in Lincoln.

“I wish it would, but it won’t,” he said. “We just don’t have the same opportunities they have over there.”

He said the one-cent increase in sales tax brings in $500,000-$600,000 each year for Lincoln.

Hereford said the one-cent sales tax increase for Pell City would bring about $2 million but according to past city audits, the additional tax hike is more likely to generate closer to $2.5 million in additional revenue for Pell City.

The last time there was a sales tax increase for Pell City was in 1993, according to city records.

Most cities surrounding Pell City have a 9-precent or less sales tax charge.

Odenville, Moody, Springville, Trussville, Talladega, Anniston and Vincent have a 9-percent sales tax, while Ashville, Childersburg, Sylacauga and Ragland only have an 8-percent sales tax charge.

Ragland Mayor Lanis White said he hopes the low sales tax charge in their city will not only attract customers for their local businesses but new businesses looking to locate in St. Clair County.

“Businesses look at those sales tax numbers,” he said.

White said Ragland has several businesses, including two grocery stores he says that have some of the best meat around.

“We do attract people (shoppers) from outside our city,” he said.

Riverside is sandwiched between Pell City and Lincoln and charges a penny less in sales tax than both of those cities, if Pell City approves its sales tax hike Monday night.

Riverside Mayor Rusty Jessup said retail businesses in his town are limited, with most of the sales tax revenue generated from Dollar General and Riverside Outdoors stores. There are not any other major chain stores or grocery stores in Riverside.

“We’ve been working on getting a grocery store,” he said. “We pretty much live on ad valorem taxes right now.”

Jessup said he would welcome new shoppers, looking to save a penny on a dollar.

“But, I don’t think a penny is going to change people’s shopping habits,” Jessup said.

Leeds Mayor Eric Patterson agrees, saying city officials raised Leeds’ sales tax to 10 percent in 2003-2004, during a time the city was financially strapped.

“I’m not a proponent of any taxes,” he said, adding that the sales tax increase in Leeds happened before he took office.

Patterson said the tax increase was to help pay the large debt service the city had incurred, and the bond debt for the school system.

He said people might travel elsewhere to purchase larger ticket items, but for normal purchases, it’s all about location and convenience for shoppers.

“But, I don’t think it (the sales tax increase) has hurt consumption here,” Patterson said.