When it comes to taxes, Athens residents pay their fair share.

Residents pay both sales tax and property tax but also lodging, rental, franchise, gasoline, tobacco and rental taxes, when those apply to them. (If you don’t smoke, you don’t pay tobacco tax.)

Some 40 percent of the city’s revenue comes from sales tax.

Compare that to Limestone County, which relies on property tax to pay for its needs.

Sales tax

The city charges 9 percent sales tax on most purchases, including food. Though the state Legislature has talked for years about removing the sales tax on food, it has yet to make the change. Many states do not charge sales tax on food because it burdens the poorest citizens.

When the 2012 City Council voted to raise Athens’ sales tax from 8 to 9 percent, there was some opposition from business owners and others. They argued that while the 9 percent sales tax rate would match surrounding cities, an increase would take away Athens’ lower sales tax advantage, which they believed would keep shoppers shopping here and also draw others from Madison and Huntsville.

Here are the current sales tax rates for Athens and some surrounding cities:

Harvest — 5.5 percent

Florence — 8.5 percent

Athens — 9 percent

Huntsville — 9 percent

Madison — 9 percent

Decatur — 9 percent

Birmingham — 10 percent

Nevertheless, the council in 2012 decided the penny raise was needed. But, rather than let the extra penny be used for any purpose, the council earmarked it for specific improvements, which has proved beneficial in providing more for road paving, the new Athens High School and other projects.

Who gets what?

Of the 9 percent sales tax Athens collects on purchases, 4 percent goes to the state, 2 percent goes to Limestone County and is appropriated to the city and county school systems proportionately based on enrollment, and 3 percent goes to the city, said City Clerk Annette Barnes Threet.

Of the city’s 3 percent, 1 percent goes into the general fund, 1 percent is appropriated to the city school system, and the remaining 1 percent — the money from the city’s 2012 penny sales tax increase — is allocated as follows based on the 2012 ordinance:

30 percent – General fund

30 percent – Capital infrastructure fund

20 percent – Contingency fund

20 percent – Special school fund

Property tax

People who own their own land, homes or businesses pay property taxes on those items. The county collects property tax and remits it to the cities within its boundaries.

The city receives 10 mills of the total 40 mills of property tax assessed within the city limits. That 10 mills of property tax generates approximately $2.4 million to $2.5 million annually, Threet said. Five mills is deposited into the school bond debt service fund (to pay the schools’ debt) and 5 mills goes into the city’s general fund, she said.

• Other tax

The city has a variety of other taxes such as lodging, rental, franchise, gasoline, tobacco and rental.

Cheaper utilities

As for utilities, the electric cost for the average resident is $137 a month, assuming the average usage of 1400 kWh per month, according to Athens Utilities General Manager Gary Scroggins.

“This is in the lower 20 percent of TVA utilities in Alabama and approximately $10 per month below the median price of TVA utilities in Alabama,” Scroggins said. “Electric rates are the same for all customers inside or outside the city.”

As for water, an Athens Water Services customer inside the city limits with a 5/8-inch meter and 6,000 gallons of water service will pay $29.68 per month, Scroggins said.

“Water rates inside the city are substantially less than county water rates,” Scroggins said.

How do we make more?

Since the city relies so heavily on the sales tax it collects each year, city officials are trying to find ways to increase that revenue in the future.

One way city officials are trying to improve is making City Hall a “one stop shop” for existing businesses wanting to expand and new businesses wanting to come to Athens.

In the past, those business people had to travel to various locations in the city for permits, inspections and other steps needed in the process. The owners sometimes experienced delays or simply found the process cumbersome.

Amy Golden, who is a customer relations manager for Athens Utilities, heads the city’s newly created One Stop Shop. She guides owners through every step of the process, taking the owner to the various departments required in the process so the business owner is never uncertain what step is next and she follows up with each department to make sure work is progressing.

Bringing inspections personnel into the new City Hall building in downtown Athens has made it easier.

“Through the city’s One Stop Shop, we are currently working with potential new businesses and existing businesses to help grow and expand retail,” Threet said. “Sales taxes generate approximately 40 percent of our total general fund revenues, so the growth of retail is vital to increasing our revenue base.”

The city also recently hired Birmingham-based r360 Consulting, which provides in-depth market analysis, strategic planning and retail recruitment solutions to municipalities and economic development authorities.

The firm will analyze the current and potential customer base to help existing businesses increase their numbers and to recruit the new businesses residents want and that can succeed here.