The council voted 5-1 Thursday night, with Councilman Hooky Huffman opposed, to charge a 3 percent tax on cars rented in the city.
Hobgood hopes the money collected can be used to encourage economic development in the city, while Huffman fears the tax will target a single business, as Canton has but one established car rental company.
Huffman argued against the measure during the meeting, calling it a “restrictive” tax that will also increase the burden on Canton residents, because a large chunk of customers at Canton’s car rental company, Enterprise Rent-A-Car, live in the city.
“It is going to be a tax, not a fee. It is a real tax of approximately $160,000 on the citizens of Canton,” he told the council.
Hobgood disagreed with Huffman’s assertions Tuesday.
“This is a user fee. You also have a choice that you rent the car. It is a user fee,” Hobgood said in an interview, adding he thought the $160,000 number was high. “I think the more user fees we can get and keep it off the property taxpayers, the better off we are.”
The mayor said he hoped the money collected could aid in the city’s push toward economic development, without increasing property taxes.
“It’s going to benefit the city tremendously,” he said.
The council left what the money would be used for open-ended, as the tax doesn’t take effect until Oct. 1 at the beginning of fiscal year 2015. How the money will be used is planned to be determined by then.
Councilman Glen Cummins, who is serving as acting city manager, said he’d originally been against the tax until he saw the many uses the proceeds could be used for, including public safety.
Huffman said during the meeting he — and likely Enterprise — could accept the tax, as long as the money was used for a good purpose. According to Huffman, the best purpose for the money would be building a fire station in the Laurel Canyon area, where many have expressed a need for improved fire services.
“We’ve been talking about it since the year 2000. Now, it’s time to put up. We can do this,” Huffman said.
Huffman said he would be in favor of the tax if he were given a guarantee that the money would be used for the new fire station.
“I hate to use the word … but I just don’t trust the system to where we will spend the money where it needs to be spend,” he said. “It’ll get into the big pot of the general fund, and, all of a sudden, it’s gone.”
Members of the council didn’t seem opposed to using at least part of the money for a fire station, but the council decided to address how the money was used during the budgeting process.
Hobgood said Tuesday perhaps some of the money could be used to fund the new fire station, although the initial purpose was to help the Main Street program, which aims to improve downtown.