An increase of 1 cent in sales tax approved for the City of Atmore earlier this week could mean up to $1.2 million annually in additional city funds, according to sales tax records.

But several factors will affect the eventual total.

“More and more people are shopping online and cities don’t get any of that,” Mayor Howard Shell said Friday. “That’s a major decrease in revenue.”

With uncertain economic times, Shell said there is no way to tell if a business is going to open or close offering additional sales tax revenue or cutting into city coffers.

“So what we are seeing this year in revenue, we honestly don’t know how we are going to be affected,” Shell said about the increase. “I have talked to other mayors that are the same way; you can’t take a number and translate it into what you are going to do next year or the year after. You can hope that you hold on to it, but you don’t know.”

The city has already brought in $1,121,179 in sales taxes in the current fiscal year, which began Oct. 1, 2010. If trends continue, the city is on pace to earn $3,363,537 in sales tax this fiscal year, based on the 3 cents the city earns from its current sales tax rate. With the additional tax not being implemented until April 1, it is unclear what the city could potentially earn this year. However, Shell knows that it will not give the city any wiggle room.

“It’s not going to be above and beyond and give us funds to do everything with,” Shell said. “We’ve got so much used equipment, streets that need paving and things that we need to do. With this in place now, it won’t take effect until April 1. Then the city will not see it until June or July. You might be looking at $350,000 to $400,000 this year.”

It could be easy to translate the $3,267,026 in sales tax revenue generated for the city last year into more than $1 million at the conclusion of fiscal year 2012 when the new sales tax revenues are felt for entire 12 months of a budget cycle, but Shell is not banking on it.

“You pick up the paper and read the news every day and see that the federal government is eliminating CDB Grants (Community Development Block) right and left, so you can’t take these numbers and translate them and say that’s exactly what they are going to do,” he said. “In a perfect world you could, but it’s not a perfect world and we have no idea what it will do next year to be honest.”

With the sales tax increase, the City of Atmore will now earn 4 cents on the dollar, as opposed to 3, while the state will continue to earn 4 cents and the county 1 cent.

In addition, the city voted Monday to increase the gas tax from 2 cents on a dollar to 3 cents. The city earned $192,947.87 in gas tax revenue in 2010 and has currently received $55,429.61. On average, motorists spend between $80-$120 at the pump monthly, which would increase their spending anywhere from $9.60 to $14.40 additional per year in gas.

The city’s lodging tax of 8 percent also increased two pennies to 10 cents on the dollar and the rental/lease tax increased three cents, from 2 cents to 5 cents. The city earned $266,418.56 in lodging tax last fiscal year and has already earned $91,484.45 thanks in part to the success of Holiday Inn Express located in the Rivercane development at Interstate 65. The city does not receive lodging tax from the 236-room Wind Creek Casino & Hotel.

Rental/leasing tax generated $107,981.61 in 2010 and has already brought in $53,298.98, which could be a direct reflection of the economy and homeowners being forced to move into apartments and townhouses with projections this year more than $150,000 at the old tax rate.

Shell said all of the tax increases would hopefully prevent the city from taking more extreme measures such as other cities across the nation.

“You see more cities and states are squeezing down and closing schools, closing fire stations and laying off police officers,” he said. “Someone told me that the City of Monroeville cut out half the street lights. All of these things we have not done yet. We are trying to get out in front. To be honest, we do not know where it will go, but we had to take some action.”