City gets sunset of proposed penny tax extended

by Ted Carter

Published: February 2,2011

Tags: infrastructure, municipal government, state government, taxes

JACKSON — The City of Jackson’s hopes for an eventual fix to its crumbling infrastructure, especially its water and sewer systems, survived a key Mississippi Senate Finance Committee vote yesterday.

The committee approved an amendment to legislation passed last year to allow Jackson to stage a referendum on enacting a penny special option sales tax to fund the infrastructure work. That bill, however, had a 2014 sunset provision for the special tax and specified that only 80 percent of the money could be spent on water and sewer, with the remainder going for road maintenance.

The amendments that cleared the Finance Committee extends the sunset of the special tax to 2023 and removes the proportional spending in favor of allowing the money to go to a mix of water and sewer and roads that the city will decide.

Mayor Harvey Johnson made the amendments the city’s single legislative priority for the year. Though a special option sales tax would have to receive super majority of 60 percent form city voters, the mayor’s office says it thinks voters would prefer the penny tax over huge increases in water and sewer bills that would be needed to fund the infrastructure overhaul. City officials say they expect the penny tax could raise $15 to $20 million a year.

A provision for an oversight committee remains. It requires that spending of the tax be reviewed by a panel made up of three city residents appointed by the governor, three city residents appointed by the mayor and a selection by the mayor of four of eight nominees presented by the Jackson Chamber of Commerce. The four selections from the Chamber’s list of nominees do not have to be Jackson residents but must have “significant” business interests in the city.

State Sen. John Horhn, sponsor of last year’s special option tax legislation and sponsor of this year’s amendments, said he expects a “bit of battle on the Senate floor” on the amendments, noting opponents are concerned the penny sales tax is to regressive and hits hardest at those least able to pay. Legislators were highly reluctant to approve last year’s special option tax and persuading them to extend the tax for another decade will be a challenge, he said.

“We typically don’t do this local option sales tax on non tourism related activities,” Horhn said.

The veteran lawmaker said he expects success with the amendments if they should make it through the Senate for a vote in a more-receptive House. “If it survives that process my optimism rises tremendously,” he said of the Senate vote.

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