For First Time, Local Option Sales Tax Clears Hurdle

By The Associated Press

JACKSON, Mississippi — A Mississippi House committee has given municipal officials what they’ve wanted for more than 20 years — a chance at passage of a local options sales tax.

The House Ways and Means Committee on Tuesday approved a bill for a 1 percent local sales tax as a way to build parks, improve water systems and get crumbling streets back into shape.

Legislators have resisted local tax proposals for years.

House Bill 523 provides a local sales tax could be set only if there’s a city election and at least 60 percent of voters approve.

The bill would require cities and towns to spell out in any sales tax proposal to voters what the money — if approved — would be spent on.

Rep. Steve Holland, D-Plantersville, arguing for the bill, said cities cannot keep taxing homeowners and businesses to address infrastructure needs.

“The Legislature has to realize that we’ve got to give them some options other than ad valorem taxes,” Holland said. “All cities need a vehicle to fund their priorities. This issue has been dragging around here for two decades.”

No one spoke against the bill.

Over the years, opponents have argued any local tax would not benefit counties. County residents, they say, would pay the tax when they come to the city to shop but would get no benefit.

“I trust local officials … I trust local citizens” to make the right decisions, said Rep. Ed Blackmon Jr., D-Canton, chairman of the House Municipalities Committee.

Over the years, local option sales tax proposals have taken many forms.

Among the early proposals pressed by municipalities was a 2-cent local sales tax, no strings attached.

Failing with that, supporters agreed to an election, upon petition by the voters.

When that failed, they came with a mandatory election.

They returned with a smaller tax and a mandatory election.

Now, what remains is what Blackmon called a “limited tax” with a mandatory election, a tax tied to specific projects and a tax that automatically repeals when no longer needed.

Bills have passed separately in the House and Senate from time to time. Nothing has reached a governor’s desk.

Cities have seen tax bases shrink as people move outside municipal boundaries. Nevertheless, the demand for services has not lessened. And besides the usual federal and state mandates, municipalities must now find money for Homeland Security obligations.

Municipal leaders have sought relief in the Legislature — not secure enough to pass the financial burden onto property owners, their chief source of income. Cities have pushed property taxes as much as they dare. User fees, such as those paid for water and sewer services, are unpopular locally.

Categories: Local News

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