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Getting it right: Johnston Town Council corrects Motel Tax problems


web posted December 30, 2008
JOHNSTON – A new accommodations tax ordinance that was given a final reading on December 8 by the Johnston Town Council required that a Public Hearing be held, which did not take place. The oversight required the town council to hold a special called meeting on Monday that included a Public Hearing and a third reading of the ordinance to get it right. It turned out that it was a good thing because the tax was set at 7% when the state law allows a cap at 3% for municipalities. The lower tax rate also means less revenue so the town also had to amend the budget which, by law, must remain balanced.

The 2 pm meeting began with the normal formalities and was called to order by Mayor Willie Campbell. Councilmen Buddy Smith and Tommy Burton were absent. Mayor Campbell then called to open the Public Hearing to receive comments from the public. As no citizens attended the midday meeting, no comments were received.

Town Administrator Keith Coones explained that the town council could hold as many readings of an ordinance as they want, “but you have to hold at least two,” he said. Mr. Coones explained that discovering the town could not impose a levy of 7% the ordinance would have to be amended to reflect the allowed rate of 3%, which was included in the ordinance for the third reading.

The lower tax rate in turn changed the expected revenues and that affected the budget and had to be resolved. A first reading of ordinance to amend the budget was already necessary before the lower expected tax revenues due to funding cuts from the state in the form of “Aid to Subdivisions”.

Due to budget cuts at the state level the Town of Johnston received a 4.5% cut in aid which totaled $4516. In the ordinance to amend the budget the shortfall was made up by a reduction from a Fire Department salary line item ($2,024) and a cut in the town council’s contingency fund ($1,562) and proposed revenues of the accommodations tax levy ($930).

Mr. Coones explained that the tax would be on those who rent to “transient” people (those who stay less than 90 days). It would also include a bed and breakfast with six rooms or more.

Councilwoman Tyra Miller asked if a family were burned out of their home or had to leave for other circumstances and had to stay at the motel longer than 90 days would they still have to pay the additional tax. Mr. Coones said that if there was a contract in place, or a lease, extending beyond the 90 days they would be exempt.

Both ordinances passed with a unanimous vote.

Mayor Campbell told the council that he has been approached concerning a prayer vigil to be held downtown on January 10 at noon.  Mayor Campbell said it was his understanding the group would meet near the mural in the town parking area but would not require it to be closed off. The council agreed to allow the group to gather.

Councilman Morris Holmes brought up a concern regarding the recent testing of the tornado warning system. Mr. Holmes stated he was unable to hear the siren and thought it was not as loud as the fire siren. Councilwoman Tyra Miller, a schoolteacher, said she was unable to hear it at the Elementary School just a few blocks away. Councilman Holmes stated, “It needs to be heard at the school. We’ve got a couple hundred kids there.” 

Mr. Coones stated that he has talked to EMA Director Mike Casey about the concerns but to provide a louder siren would incur more expense. Coones suggested that another test be conducted and have Johnston Firemen stationed at different location around the town to report how far it could be heard and the council agreed that would be a good way to review the matter before moving further into the subject.

At the end of the meeting Mayor Willie Campbell thanked the council for their hard work throughout the year and that even though there were some rough spots along the way, he felt everyone kept the town’s best interest at heart.

With no other business the meeting was adjourned.

 
 




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