The newly elected Bayou La Batre City Council approved a 1 percent sales tax increase during its first meeting Monday.

Mayor Stan Wright said stagnant revenues and the expense of operating a full-time fire department have made the tax increase necessary.

The move was one of several key votes the council made during a busy meeting. The council also approved a $2.95 million budget for the fiscal year that began Oct. 1 and hired a city revenue officer, who is charged with bringing more funds into the city's coffers.

The votes came after new council members Matthew Nelson, Louie Hard and Edgar Burt, along with returning council members George Ramires and Ida Mae Coleman, were sworn into office.

The local sales tax will increase from 3.5 percent to 4.5 percent, city officials said, bringing the total sales tax rate in Bayou La Batre — including state, county and school taxes — to 10 percent.

During the 2007-08 fiscal year that ended Sept. 30, sales tax generated $1.2 million in revenue for Bayou La Batre, up slightly from about $1 million the previous year, city officials said.

With the increased rate, Wright said, the city will likely receive an estimated $1.5 million in sales tax revenue this fiscal year.

He said the city had expected a rise in revenue from business license fees, which are based on the gross receipts of local companies, but that never happened.

The city must continue to pay for its fire department, which was formed in 2006 to replace a volunteer fire department, Wright said. The fire department operates on a $330,000 budget.

In an effort to find more revenue, the council decided to hire accountant Craig Taylor for the new position of city revenue officer. Wright said Taylor will be paid $75 per hour to search for tax revenues that haven't been collected by the city.

"I think this will be the best money we've ever spent," Wright said. "He will make sure the city is recouping what tax is due to the city."

The $2.95 million budget passed by the council Monday night was about $630,000 less than last year's budget of $3.6 million. Expenses in almost every area — from the police department to the library — have been cut.

"I know this hurts," Wright said. "It's going to be rough the next couple of years."