Economic Overview and Outlook for the Montgomery Metropolitan Area June 2014 | Page 7

Economic Overview and Outlook
for the Montgomery Metropolitan Area

Sales Tax Collections

TABLE 16: HOUSING PRICE INDEX, 2004-13
Metro
Anniston-Oxford-Jacksonville
Auburn-Opelika
Birmingham-Hoover
Daphne-Fairhope-Foley
Decatur
Dothan
Florence-Muscle Shoals
Gadsden
Huntsville
Mobile
Montgomery
Tuscaloosa

HPI
153.35
160.58
159.28
171.79
151.71
156.79
151.2
175.88
156.22
155.09
139.83
176.3

Table-17 and Table-18 show the sales tax collections during the
last five years. All four counties in the Montgomery metro have
shown continuous increases in sales tax collections.
TABLE 17: MONTGOMERY METRO-SALES TAX COLLECTIONS
Year
2009
2010
2011
2012
2013

Permits for multi-unit housing took a huge dip from 521 units
in 2010 to only 110 units in 2013.

Montgomery
$65,189,045
$65,904,429
$68,684,023
$72,291,153
$74,631,089

COUNTIES
Elmore
Autauga
$9,782,503
$4,889,444
$10,069,249
$5,044,826
$10,367,277
$5,479,507
$10,607,742
$5,539,406
$10,894,388
$5,664,885

Lowndes
$817,194
$833,428
$907,545
$937,219
$981,078

Table-18 compares the sales tax collections of the four cities
and the town of Pike Road in the Montgomery metro. During
2013, Montgomery city collected $93.74 million in sales tax
while Prattville city collected $19.88 million and Wetumpka
collected almost $6 million.

According to the Alabama Center for Real Estate (ACRE),
the professional residential real estate community has a very
optimistic outlook for spring 2014. All indicators are at the
highest 2nd quarter levels and are above 50 indicating expected
expansion. The availability of credit has also finally turned
positive for the first time.

TABLE 18: MONTGOMERY METRO-SALES TAX COLLECTIONS
CIT IES/TOWN
Year

The Federal Housing Finance Agency (FHFA) publishes the
Housing Price Index (HPI), a quarterly broad measure of
the movement of single-family house prices. The data for
Montgomery metro from 2010 to 2013 are shown in Table-15.

2009
2010
2011
2012
2013

The FHFA HPI for Montgomery in Q4-2013 is still very close
to the recession low. The data of building permits and the
inventory of unsold homes do not forecast any sustainable
increase in home prices in the near future.

Montgomery

Prattville

Wetumpka

Millbrook

Pike
Road

$83,181,972
$86,585,678
$88,105,849
$92,398,637
$93,737,756

$11,177,267
$14,022,593
$15,451,354
$19,245,260
$19,884,845

$5,404,427
$5,350,354
$5,413,477
$5,656,595
$5,973,806

$4,940,940
$5,241,770
$5,345,463
$5,680,410
$5,767,380

$1,604,660
$ 1,937,269
$1,656,701
$1,763,512
$1,915,702

The decision of Prattville to increase the sales tax to 9.5%
effective May 1, 2011, has had a dramatic impact on its sales tax
collections. The city may not need this level of sales tax until
September 30, 2031, to pay off its long-term bond debt.

The FHFA HPI in Q4-2013 for all the 12 metro areas in
Alabama are shown in Table-16 . Montgomery had the lowest
HPI in Q4-2013 among all metros in Alabama. Compared to
other metro areas in Alabama, housing prices in Montgomery
are a bargain.

Sales tax is a regressive tax, and Montgomery city at 10% has
the second-highest sale tax rate in Alabama. Wetumpka at 8%
has one of the lowest sales tax rates in Alabama. The sales tax
rate in the city of Birmingham and the city of Huntsville is 9%.

7

Montgomery city has the
2nd highest sales tax rate in
Alabama while Wetumpka has
one of the lowest sales tax rate
in the state.