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Give communities local option tax authority

Mississippi Musings

Forget global warming and world peace.

Ask any Mississippi mayor or city council member what citizens really want. They’ll tell you about complaints of poor roads, ditches that overflow in a downpour, garbage that doesn’t get picked up, criminals who don’t get caught, children with no place to play, etc., etc., etc. While our eyes have been focused on the national election and presidential politics, our real concern is what happens in our hometowns.

With the slowing economy and the drying up of state funding, cities and towns across Mississippi are feeling the pinch of tight budgets more than ever. Municipalities have seen their cut from sales tax dropped from 20% to 18.5%, and they struggle to pay for the basic services out of regular budgets. Meanwhile, citizens clamor for those things that will improve the quality of their lives. And beleaguered officials can only respond by displaying empty pockets.

Now, those city officials are looking to our Legislature for help.

Elected officials and community leaders are not asking for more money from the state. They are asking for permission to help themselves, permission to give their constituents what they want. They are asking for authority to pass a local tax to pay for particular projects.

While the word “tax” may be a dirty word to some people, remember the Boston Tea Party was not about too much tax. It was about being taxed without being asked first.

A local option sales tax would give cities a way to fund projects needed in their area, without straining existing budgets. The tax would be a “sales tax of up to 1% on items currently taxed at 7%.” As the name implies, it is optional.

Approval for this tax would come from the citizens, not the city council. Citizens would vote on the issue, and a 60% majority would be required for this tax to pass.

Further, a city could not keep the tax in effect indefinitely. It must be linked to a particular project, i.e. playgrounds, sewage projects, convention centers. Each project and its corresponding tax would stand alone. As soon as the project is paid for, the tax ends. If another project comes along, a new vote would be taken.

For most people, paying tax to cover a bureaucracy and its expenses is not appealing. But paying tax to cover a project that makes life better for them is much more palatable. Add to this the ability to choose, and you’ve got some happy constituents.

This seems like a win-win situation.

Legislators don’t have to find more money in their already depleted budget. They don’t have to tax the whole state to pay for needs of the municipalities. They pass on the burden of proof for each project to city officials. They allow citizens to decide for themselves what they will pay for and what they will pass on. But this bill was actually introduced in last year’s session and was shot down immediately.

So, what’s the problem?

Mayor Shirley Hall of Richland has led the charge for this bill. On a daily basis, she finds herself in the role of an economic developer.

Cities must be “constantly recruiting business” in order to survive, but their hands are tied when it comes to paying for those items which will attract that business. What does Mayor Hall and other city leaders want?

“We need some help. Give communities the authority to govern themselves,” she said.

Gov. Ronnie Musgrove has introduced legislation that has a form of local tax in it. But it is strictly for new economic development and does not allow city officials full authority.

“Every community is different. Our problems are not just new economic development but decaying infrastructure,” Hall said.

Some projects that might be completed using local option funds would be water/sewer projects, street improvements, new city buildings, and recreation facilities. The power in this proposal is that cities could decide for themselves.

As Mayor Hall said, “If (the citizens) want a soccer complex, let them have a soccer complex.”

Senate and House Committee chairmen have continually thwarted efforts to bring this bill to the floor.

Giving the power to tax to the local government would, in their view, hinder their ability to tax on a statewide level. Also, remember, the word tax makes all politicians pale, because they fear being blamed when it comes time for reelection.

While I understand their concern, I would urge them to put more power into the hands of the people. Trust the citizens of Canton, Madison and Richland to choose for themselves. Allow the people of Clinton, Pearl and Brandon to make their own decisions.

Let the voting booth speak for itself.

Nancy Lottridge Anderson, CFA, is president of New Perspectives Inc. in Clinton, (601) 924-9828. Her e-mail address is nl2invest@aol.com, and she’s on the Web at www.newper.com. Her column appears regularly in the Mississippi Business Journal.


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