Helena is gearing up for upcoming elections while grappling with significant budget issues, leading officials to consider a 1-cent increase in sales tax, pushing it from 9% to 10%.

This increase is anticipated to raise around $2 million annually, aimed at bolstering public services and infrastructure projects.

During a recent City Council work session, Councillor Chris Willis introduced the proposal, highlighting it as a necessary step for managing the city’s rapid growth and supporting essential services.

As one of the fastest-growing towns in Shelby County, Helena currently has fewer resources compared to neighboring areas.

City officials plan to hold at least one hearing for residents and business owners to share their thoughts on this tax hike. The discussion is expected to commence in June, with a final vote likely by the fall.

This proposal comes in light of an audit revealing that Helena exceeded its budget by over $11 million last fiscal year.

The city reportedly concluded the year with a substantial fiscal deficit and overspending in several areas, particularly concerning large projects like the new city hall and sports complex.

A financial analysis by Sungho Park, an assistant professor of public policy and management at the University of Alabama, indicated that Helena’s debt ratio stands at 0.896, significantly above the recommended threshold of 0.03, pointing to high long-term risk. He also noted that the cost per resident for the new city hall is notably higher than the average for similar developments nationwide.

City leaders are aware of the audit’s findings but believe some of the issues stem from outdated budgeting practices.

Mayor Brian Packet, who has chosen not to run for reelection, mentioned that the audit only reflects a brief period of the city’s financial situation before bond sales could replenish reserve funds. Still, there are ongoing concerns about the sustainability of the city’s financial strategies and whether simply increasing revenue will suffice without deeper structural changes.

The local political scene is shifting, with elections set for August. Most current council members, including the mayor, are not running again. Only Council President Alice Robel and Councilman Andy Healy have shared their intentions for the future.

The new council will ultimately determine how to utilize any additional funds generated from the proposed tax.

Recently, there’s been a mounting call for transparency and fiscal responsibility as residents question spending decisions. While raising taxes might alleviate some budgetary pressures, concerns about oversight and financial governance linger in public discussions.

City officials say that future hearings will serve as a platform for the community to express their opinions before any final decisions are made. If approved, the tax increase could potentially take effect this fall.