Local government leaders are turning to everyday Mississippians to foot their bills — at least 15 of the state’s largest cities and counties have recently raised property taxes.
City and county leaders supporting the tax increases – many of whom are Republicans straying from a traditional party value of less taxation – are strapped for cash, facing expensive infrastructure upgrades, lacking technology to meet the needs of residents, needing newer, safer emergency vehicles, and having gone several years without giving raises to employees.
To meet the local budget needs, Mississippians in Jackson, Hattiesburg, Greenville, Horn Lake, Natchez, Columbus, Gautier, Hernando, Brandon, Ocean Springs, Hinds County, Lowndes County, Oktibbeha County and Clay County will pay more in property taxes next fiscal year.
“Many of the cities that have decided to raise property taxes have been very conservative about doing so in the past, so for them to make this decision means that they have very few options to fund the critical services that citizens expect and deserve,” said Shari Veazey, executive director of the Mississippi Municipal League.
Cities generate the majority of their revenues from sales taxes and property taxes on homes and vehicles, while counties rely solely on property taxes.
Citizens expect basic services like passable roads, clean and accessible parks, reliable garbage pickup and government buildings up to code. Local governments pay salary and benefits to their employees, who ensure that citizens’ needs are being met.
The financial burden on local governments is great, but failure to meet basic needs and services could spell political and legal trouble.
Local governments are required to comply with Environmental Protection Agency mandates for water and sewer systems, and they must meet basic bridge inspections. State mandates force local governments to fund portions of K-12 education.
“Counties have to maintain roads and bridges, and they get most of their money from property taxes,” said Derrick Surrette, executive director of the Mississippi Association of Supervisors. “Roads and bridges repair is going up, up, up. If you try to buy asphalt today, it costs 7-10 times more than it did 10 years ago. The problem is, the value of our homes and cars haven’t gone up 7-10 times. What else can we do but raise taxes?”
State leaders at the Capitol, enjoying a Republican supermajority in both houses, have long balked at the notion of raising taxes. Instead, they’ve cut taxes. In 2016, the Legislature passed its largest single tax cut in state history, totaling $415 million over 10 years, and experts say it will prompt additional spending cuts.
The majority of the state tax cut comes from the elimination of the corporate franchise tax. Mississippi Today reported last month that the elimination of that tax will most directly benefit out-of-state corporations. The tax cut will also phase out the 3 percent individual income bracket and some self-employment taxes.
Once the package is phased in, the state will have at least $415 million less in tax revenue per year to spend on basic public services, on top of at least $577 million the state has lost in revenue from 51 other tax cuts since 2012. Despite some revenue growth from rising income tax and sales tax collections, among others, in most cases that lost revenue will require budget cuts.
Because of the decreased tax revenue, state lawmakers have been forced to cut state agency budgets more than anticipated. At the same time, to offset lower-than-projected revenue collections, the state has cut the budget mid-year five times in the past two fiscal years. Failure to meet those projections was among the reason lawmakers appropriated less for the upcoming fiscal year than the previous fiscal year.
“From where I sit, I see a big government tightening its belts,” said Brandon Mayor Butch Lee, a Republican. “That has a consequence to state government, and it has a consequence to local government. That leaves local government on the realm of, ‘You either stand on your own feet or you don’t stand.’ Even our staunch Republicans have pushed down taxation to the local level.”
Local leaders who spoke with Mississippi Today said state budget cuts always find their way down to their residents. And for the foreseeable future, they said, the burden falls on their shoulders.
“There’s no white horse going to ride in with gold in the saddlebacks to help solve your problems,” Lee said. “It’s up to your residents, or nothing’s going to get done. Between the squeezing of funding from all levels and the aging infrastructure, no one’s coming to help.
“It’s not something you ever want to do, but at this point, what’s the alternative?”
Local tax increases approved recently include:
• Brandon leaders voted to raise property taxes by four mills and the raised water and sewer flat rate from $6.12 to $15.56. The increases in taxes and fees will help pay for infrastructure and water main improvements downtown, which has seen an influx of private investment.
• In Hernando, home to 14,000 residents, the property tax rate will increase by 5.8 mills, which will provide about $835,000 more in one year for public safety and infrastructure upgrades. Hernando’s tax increase is the first “in decades,” Mayor Tom Ferguson said.
• Leaders in Jackson, the largest city in the state, looking to fill budget holes and be in better financial position to repair the city’s decades-old infrastructure woes, raised property taxes by two mills, which will generate more than $2 million next year.
• Columbus leaders approved a two mill property tax increase — expected to generate $384,000 next year — that will provide pay raises to the city’s police officers and firefighters.
• Natchez leaders raised property taxes by four mills, which would generate about $472,000 for raises for police and fire department officials.
• Leaders in Ocean Springs raised their property taxes by three mills earlier this month. “State budget cuts always affect everyone,” said Mayor Shea Dobson, a Republican. “The board of aldermen felt that we needed to invest more in infrastructure. We have aging infrastructure, and we’d like to give more employees raises. Essentially this will allow us to be competitive with the rest of the Coast.”
• In Hattiesburg, the state’s fourth largest city, leaders increased property taxes for the first time in “the better part of two decades,” Mayor Toby Barker said. The independent who was elected this year after serving in the Legislature said new revenue will go toward a new fire station to hold onto a high fire rating, and future debt services payment for a new police station.
• In Greenville, city leaders raised property taxes by four mills. The increased tax revenue will help the city pay for a 35 percent increase in health insurance for its city employees and balance the city’s parks and recreation budget.
• Horn Lake leaders voted to raise property taxes by four mills. The roughly $5 million in new tax revenue will help pay for current bond notes and an increase in police salaries.
• Property taxes in Gautier will rise by more than three mills next year, generating an additional $400,000 in tax revenue. City leaders will use the new revenue to give raises to officials in its police and fire departments, helping them address a retention issue.