This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.

HUNTSVILLE, Ala. – The Huntsville City Council approved a contract for the new amphitheater in MidCity in November, but details on how that project will be funded aren’t set in stone yet.

Wednesday night at a special called council session, city administrators presented the plan for a budget and where money will come from to build it.

City council members are split on the details of how to pay for the $40 million project. The disagreement boils down to should people traveling to Huntsville from outside of the city have to share in paying the price for the project?

Right now, the city of Huntsville plans to pay for the $40 million amphitheater from several areas: income from the venue, sales tax from within the venue, and liquor and lodging taxes.

“If those three sources are not sufficient to fully cover the debt, then our existing 2014 capital improvement plan, which is funded by sales taxes, would then budget the additional money needed to cover the debt,” said City Administrator John Hamilton.

The proposed plan is to pay off the project over 20 years.

City Council President Devin Keith is proposing to increase the liquor and lodging tax by 1%. That would generate around$1.3 million in revenue yearly, significantly more than the current budget of $200,000 in lodging taxes allocated to pay off the $40 million.

“If there are going to be people coming here for this amphitheater, they should be paying into the pot,” said Keith.

Some council members argue that increasing the tax would discourage people from staying in Huntsville. Keith doesn’t believe that’s the case.

“If I go to Nashville for a concert, if I go to other places like Chattanooga, one they have a higher lodging percentage,” explained Keith. “They have a higher surcharge and they have a higher liquor and sales tax and people still show up.”

Keith says if they increase the lodging tax, they won’t need money from the 2014 capital plan and the city will be able to put more money towards other needed projects.

“2014 will be burdened with the large amount of debt if we don’t use the plan I’ve put forward. Can it pay for it? Absolutely. But there will be roads, bridges, there will be greenways and lights that we can not do because we are paying the debt of an amphitheater,” said Keith.

Keith plans to formally propose a liquor and lodging tax increase in March. If passed, the tax wouldn’t take effect until the following year. Keith also pointed out that the council and undo the tax increase after this is paid off.

34.730369 -86.586104