Starkville to consider tax increase due to coronavirus shortfalls
A tax increase of two mills might be in order for the city of Starkville as the city continues to grapple with the financial effects of the COVID-19 pandemic.
During a budget presentation given Friday morning by Ward 2 Alderman and Budget Chair Sandra Sistrunk and Mayor Lynn Spruill, Sistrunk spoke to the revenue loss seen by Starkville and other communities. She said the two mil tax increase would help make up the shortfall, along with possible bond debt restructuring.
The increase would save the city $540,000, while the restructuring would save the city $575,000. The current millage rate for Starkville is 148.30.
“This is the solution that we are proposing, and awe are trying to be as flexible as we can
possibly be, as we go into next year and we begin to see what the sales tax really looks like, what other things look like,” Sistrunk said.
Sistrunk projected that the city would see a decrease of approximately $880,000, or 12% in sales tax. She expressed concerns that much of the city’s sales tax revenuers came from food and beverage sales, which are largely based on tourism especially during football season.
“Mom and pop shops are suffering more, so while our retail sales tax diversions may not be dropping much, it’s dropping the people who make us who we are as a community,” Sistrunk said.
She also spoke to the possible restructuring. She said it was not something she wanted to do, but that it could be done if need be.
“It is an option that’s available to us,” Sistrunk said. “If our revenue materializes in amounts that are greater than we have budgeted, we won’t have to do that. If they don’t or if they’re worse than we expected, we’ll look at the debt restructuring. We’ll do that late fall, early spring.”
Spruill said she believed the tax increase and possible restructuring was the most reasonable response to the city’s financial situation as of now.
“This is not just us, obviously, except we are, like some other cities, have built sales tax into our structure because we get more than most,” Spruill said.
She said Oxford, Hattiesburg and other municipalities with more tourism were dealing with similar issues.
“We realized that we need to be as flexible as we could going into next year,” Sistrunk said.
Other significant expense changes for the upcoming fiscal year include a one-year lease/ purchase agreement for body cameras for the Starkville Police Department at $200,000, a BUILD Grant Match at $300,000 and restoring budget cuts for personnel and other line items at $550,000.
Sistrunk also spoke to a policy change in health insurance, which would make retired city employees eligible to continue their city insurance until they are eligible for Medicare.
“You put all this together, and what these pictures should be telling you is that if you find yourself in a position of having to cut expenses in any material way, you are talking about people and you’re talking about departments that impact the public safety of our community,” Sistrunk said. “We saw that when we had to make our budget amendment mid-year.”
A public hearing on the budget and possible millage increase will be held at the upcoming Starkville Board of Aldermen meeting Tuesday night.