Budget woes scrap effort to return more cash to cities

An effort to return a greater share of sales tax revenue to DeSoto County cities and other cities across Mississippi fell victim to budget concerns during the just-ended legislative session, but the Olive Branch senator who has touted the bill the past two sessions is hopeful similar legislation approved for the City of Jackson will lead to future relief for other communities.

State Sen. David Parker, R-Olive Branch, first introduced legislation in the 2016 session that would have returned hundreds of thousands, if not millions, more in sales tax revenue to the cities where the tax dollars were generated. The bill came back up in this year’s session, which ended two weeks ago.

However, Parker said Monday, it was a hard sell in a tough budget year.

“In the end, with all the budget concerns we had this year, it did not make it to the finish line,” Parker said. The measure was referred to the Senate Finance Committee and died there.

If approved, the bill would have increased gradually the percentage of revenue returned to cities. Currently, cities get back from the state 18.5 percent of locally generated tax revenue. Under the bill originally pushed by Parker in 2016, the amount going back to cities would have increased by 1.5 percent over a three-year period until they received 20 percent.

Figures from the state Department of Revenue, based on Fiscal Year 2014 numbers adjusted for growth, estimated when the 2016 bill was introduced that Parker’s hometown of Olive Branch would have seen its tax rebate increase from $8.6 million a year to $8.8 million a year once the three-year phase-in was complete.

For DeSoto County’s other incorporated municipalities, the estimated numbers under those same projections were $14.3 million for Southaven, up from $12.9 million; $4.3 million for Horn Lake, up from $3.9 million; $3.2 million for Hernando, up from $2.9 million; and $67,353 for Walls, up from $61,080.

Although the percentages returned to cities could vary under future versions of the legislation, Parker said he hopes to revive the effort as state budget conditions allow.

He said Jackson secured similar legislation just for that city to help with infrastructure.

“I hope that will provide a precedent to move the same type of legislation forward in the future,” he said, but added: “It’s going to be very hard to move it forward in years when the budget is short.”

Local mayors have said any additional tax revenue would have been put to use quickly on infrastructure improvements such as road work. Hernando Mayor Chip Johnson said any additional tax rebate from the state would be “just returning what the state took away years ago.”

On another tax matter, Parker said he was disappointed that Southaven’s “Penny For Your Parks” 1-cent sales tax on restaurant sales died in the House. Parker introduced the Senate legislation to extend the tax, but the measure died in the House after representatives refused to support it and a similar special tax in Horn Lake.

“I was very disappointed that it didn’t even come up for a vote,” Parker said, referring to a provision that would have allowed a public referendum on keeping the tax had the House passed the legislation authorizing the extension. “At the very least, it was worthy of a vote.”

Southaven Mayor Darren Musselwhite was an outspoken supporter of the tax as a way to generate revenue without raising property taxes. The tax, which generated about $1.9 million last year, helped finance major improvements at the city’s Snowden Grove Park.