About Alabama — Municipal Government

There are more than 450 cities and towns in Alabama, and 60 percent of the state’s residents live within their boundaries. An even greater percentage of all jobs in the state (75%) are located within these “municipalities.” Their work is important to the safety and mobility of many Alabamians and to the state’s long-term development.
Municipal governments are created to serve local needs within the broad framework of state law. More than a century ago, the Alabama Legislature allowed communities with as few as 300 people to incorporate as cities and towns and granted their governments power “to adopt and enforce ordinances not inconsistent with the laws of the state.”

Paying for protection
The four largest cities in Alabama are (in order from high to low) Birmingham, Montgomery, Mobile and Huntsville. All have populations over 150,000, but the only one that is growing substantially is Huntsville. Birmingham has lost more than 35,000 residents since the 1990 Census.
Another 23 Alabama cities have populations from 20,000 to 85,000. Six have grown by more than 20 percent since the 2000 Census. They are (also in order) Pelham, Oxford, Prattville, Vestavia Hills, Madison and Alabaster. All are suburban cities near one of the “big four.”
A 2006 study by the Public Affairs Research Council of Alabama looked at how cities over 20,000 raise and spend tax dollars. The biggest expenditures are for police and fire protection, which account for 37 percent of municipal operations.

Choosing taxes
Next come public works expenditures for streets, parks, waste disposal and the like. These add another 21 percent.

Together, public safety and public works represent about $6 of every $10 of municipal spending. Municipal dollars also go toward cultural and social services such as libraries and health departments and general governmental activities including economic development.

Cities have some freedom to choose the kinds of taxes they will levy to provide such services and to set tax rates. Among cities over 20,000, sales taxes account for 45 percent of all revenue, at a typical rate of 3 percent. Property taxes raise only a third as much.

EDITOR’S NOTE — Jim Williams is executive director for the nonprofit, nonpartisan Public Affairs Research Council of Alabama.