BILL MINOR: Cities needs the right to their tax

By Bill Minor

When a 100-year-old water main in Jackson, the state capital, burst in Januar, 2010, stopping water supply to the Capitol and key state office buildings, Gov. Haley Barbour had to declare an emergency. State government was effectively shut down for three days. Portable toilets were stationed on Capitol grounds.
“This is the 21st century, with its cutting age technology,” cried lawmakers. “How could such a thing happen?” Get it fixed, and quick, they demanded of Jackson officials.
“We’ll dig up the antiquated pipes and replace them with new ones but you’ll have give us the money, we ain’t got it,” replied city fathers. “Remember,” they added, “we’re mired in the Great Recession.”
Three years later the state hasn’t coughed up the millions it’ll take to fix the capital city’s post-Civil water system that among other things, serves the seat of Mississippi’s state government.
The best the Legislature has come up with so far this session is to provide some hope of enacting HB 523, which would let Jackson, and other municipalities, slap a 1-cent sales tax on their own citizens for specific capital construction projects as Jackson’s antique water mains – but only if 60 percent of city voters approve the tax in a referendum.
A bit of history on financing municipal governments in Mississippi: local property taxes are a mainstay of city funding, but they have come to depend heavily also on the diversion of 18.5 percent of the state sales taxes collected inside the city.
Prior to 1968 – beginning in the latter 1950s – some larger cities pushed through the Legislature local and private bills allowing them to levy by referendum either a 1⁄2 cent or 1-cent sales tax.
Consequently, there was a patchwork of local sales taxes in cities scattered around the state.
When lawmakers in 1968 raised the state sales tax from 4 to 5 cents, it abolished the previous individual local levies and diverted to all cities 20 percent of state sales taxes collected inside the municipality. In the 1980s when the tax rate was again hiked, the municipal diversion was reduced to 18 percent. Then in 1992, when another penny was added to the state rate, largely dedicated to education, the city diversion was raised to 18.5 percent.
While sharing in the state sales tax collections goes a long way toward supporting city general funds, they remain strapped for revenue to undertake major capital/infrastructure projects unless they use a bond issue. Often pay-out takes longer than the project’s lifespan.
That’s why the Mississippi Municipal League came up with HB 532 which they call the “Citizens for Economic Development Act.”
As Mayor Gene McGee of Ridgeland, former president of MML, stresses, CEDA “is a tool that can allow us to be more self-dependent and will allow our citizens to help us set the future of our cities and towns.”
McGee said the proposed act is project-specific, meaning that the 1 cent additional sales tax would never be permanent, expiring with the completion of the project identified on the ballot in the referendum.
Adamant anti-taxers at the state Capitol, starting with Gov. Phil Bryant, have already jumped to the front of the line opposing HB 523. It seems highly inconsistent for Bryant as an ardent states’ righter to oppose municipalities trying to rely on their own citizens to pay for needed public construction rather than having to turn to the state or federal government to pick up the tab.
Syndicated columnist Bill Minor has covered Mississippi politics since 1947. Contact him through Ed Inman at edinman@earthlink.net.