SID SALTER: State inconsistent on local option sales tax policies

By Sid Salter

STARKVILLE – For more than a decade, veteran Democratic state Sen. Hob Bryan has successfully battled any attempt for other local governments to have the same advantage that the regional economic hub near his home county has enjoyed for more than two decades.
In the latest effort to kill an optional sales tax for the benefit of the city of Jackson, Bryan found a strong Republican ally in state Sen. Merle Flowers, R-Southaven.
Jackson was seeking the opportunity to let voters decide a 1 cent sales tax hike. Bryan and Flowers were able to prevail based in no small measure of their mastery of legislative procedures. Bryan has been a particularly vocal opponent.
Back in 2003, Bryan spoke out against one of the first Mississippi Municipal League efforts to pass a statewide optional sales tax as “unfair to rural taxpayers” in saying:
“It is absolutely horrible public policy. The problem is when you return sales tax to the point of collection; you make the wealthy trade centers wealthier at the expense of the poorer areas of the state.”
Jackson officials have long argued that Bryan’s opposition doesn’t hold water because the city of Jackson has some 45 percent of state-owned buildings in the city that are by law exempt from property taxes.
Beginning in 1989, an optional sales tax of one-quarter percent was added to pay for the city of Tupelo’s half of a $21 million, 20-year water district bond program with Lee County, according to legislative records. But since that time, the Legislature has resisted extending the same privilege to other jurisdictions for infrastructure improvements. The Tupelo sales tax required countywide referendum approval.
However, Mississippi has a patchwork quilt of optional local taxes under the guise of hospitality or tourism taxes, hotel taxes and the like. with countless Mississippi local governments already levying tourism taxes, hotel taxes, hospitality taxes and the like, hasn’t the Legislature already signaled its tacit approval of optional local taxes but deployed them by other names?
Historically, Mississippi has relied on general sales taxes as the bedrock of government finance.
The Federation of Tax Administrators reports that Mississippi ranks 42nd in per capita state and local tax source revenues at $4,984 and 47th in total state and local taxes collected per capita at $3,042.
It’s a simple public policy question: Why shouldn’t municipal and county residents have the right – with 60 percent voter approval – to impose local optional sales taxes for projects they deem necessary and beneficial to the future of their communities? Why should Tupelo have a revenue tool available that doesn’t exist for the rest of the state’s cities or counties?
Truth is, unless you can buy everything you need in the rural community or small town where you lay your head on the pillow at night, you’ve been choosing to subsidize the sales tax collections of the larger towns where you shop for years.
The policy debate here shouldn’t be about Jackson’s water and sewer. It should be about the right of voters to choose to tax themselves for what they perceive to be the common good – if that’s their desire.
Sid Salter is a syndicated columnist. Contact him at (601) 507-8004 or sidsalter@sidsalter.com.