Meridian Star

November 11, 2012

Sales tax option change a possibility

By Terri Ferguson Smith /
The Meridian Star

MERIDIAN —     Just a couple of months away from the start of the new legislative session in Mississippi, a proposal is in the works to allow cities the opportunity to levy a temporary 1 percent sales tax, if voters choose to do so.

    The Mississippi Municipal League is supporting the Citizens for Economic Development Act that would allow municipalities to add the tax to fund specific projects without having to go through the Legislature for approval first. MML is asking cities to sign resolutions of support to show lawmakers that there is interest in passing such a bill.

    "This would allow them to put before their voters a referendum for specific capital and infrastructure improvements," said Shari Veazey, deputy director of MML. "It would be available to them any time they had a capital project they wanted to fund."

    Currently, the sales tax is set by the Legislature and if cities want to add a tourism or food and beverage tax, they have to go to the Legislature to pass a private and local bill to do so. A portion of sales taxes collected by the state goes back to cities and the state keeps part of the taxes.

    The Meridian City Council on Tuesday unanimously passed a resolution in support of CEDA. The resolution is not asking for a 1 percent sales tax, it is strictly a resolution showing support of a bill that is likely to be introduced into the Mississippi Legislature.

    Veazey said she believes the bill will be introduced in January. Some of the features of CEDA are:

    • A tax would require a 60 percent referendum approved by voters

    • Revenue stays in the community

    • The up to 1 percent additional sales tax revenue can only be used for specific capital/infrastructure projects as identified on the ballot

    • A CEDA levy is never permanent

    • A CEDA levy saves money that would otherwise be spent paying interest on bonds

    • It is an option, not a mandate

    State Rep. Charles Young, (D) House District 82, said he would not oppose such legislation.

    "I think the people should have an opportunity to voice their opinion and if they want to have a tax for a needed service or provision, then I think the people deserve the right to express their voice and what other way in a true democratic process than letting people vote on it?" Young said.

    State Rep. Greg Snowden (R) House District 83 said he believes he would support the bill as well.

    "What they (City Council) are doing is voicing support for a general bill that would apply to the entire state," Snowden said. "It would have to go through the regular committee process just like everything else does. I would assume it would probably be doubly referred to the Municipalities Committee and the Ways and Means Committee because it is a tax."

    If the bill clears the committees in the House, it would go to the House floor for a vote and if it passes, it will go to the Senate.

    Snowden said this proposed legislation is not partisan driven.

    "It tends to be more of an urban, rural sort of issue or a municipal, county sort of issue," Snowden said. "A lot of people feel strongly on both sides of the issue about whether or not a municipality ought to have authority to have a sales tax."

    He said he has always believed that if people want to tax themselves, then that was fine.

    "That is an appropriate exercise of power to grant to your local officials," Snowden said. "If you don't like what they're doing with it, vote them out. I tend to be in favor of allowing people the choice to vote on a tax for themselves, if they choose to do that."