A bill to allow Jackson to raise its citywide sales tax by 1 cent for water and sewer system repairs is dead in the final days of the 2021 legislative session.
A historic winter storm in mid-February froze water plant equipment and burst many pipes in the capital city, leaving at least 40,000 residents — mostly Black — without water for nearly three weeks. City leaders, who have neglected funding the system for decades, say they need major investment from the state and federal government to repair the system, which is estimated to cost at least $1 billion.
The Jackson City Council attempted to take matters into its own hands, passing a proposal in early March to raise the city’s sales tax by 1 cent. That new revenue — an estimated $14 million per year — would be used to back large bonds for repairing and replacing the city’s water and sewer system. But state law requires approval from lawmakers before the local sales tax increase could be placed on a citywide ballot. State Rep. Chris Bell, D-Jackson, filed a bill on behalf of the city to acquire legislative sign-off on the 1-cent proposal.
That bill will die without committee consideration, House Local and Private Chairman Manly Barton, R-Moss Point, told Mississippi Today — a blow to the capital city’s main legislative ask as it struggles to afford water system repairs.
Barton said killing the bill is based on precedent — with the 2013 exception of allowing a previous 1-cent sales tax increase for Jackson — of not allowing cities to add on to the state’s sales tax.
“We have been very hesitant to do general sales tax increases for other cities. In fact, we turn them down every year,” Barton said. “We had four or five requests this year. A lot of times the bills don’t even get filed. We work with them on local food-and-beverage, hotel-motel taxes, but there’s just no appetite to do general sales taxes. We’ve been pretty consistent … Of course there was the one for Jackson some years ago — there were conditions set on that and a committee — but we have otherwise been pretty consistent.”
Barton continued: “I think the 1-cent tax would generate about $14 million for Jackson, but it’s a really big hole they’re trying to fill with infrastructure. What I did say is I would do everything I could to help find revenue somewhere else if we possibly can.”
City leaders all along have said the intended purpose of that $14 million a year in new revenue would be to back large bonds, possibly giving the city hundreds of millions they could use in the short-term for infrastructure upgrades.
“This bill, which includes a one percent tax, will support repairing infrastructure after decades of neglect,” Bell told Mississippi Today. “We’ll still need additional support, but this is a first step at a time of urgent need. Sadly, our plan hasn’t been accepted by those in leadership, which further makes our road to recovery difficult.”
Earlier this month in private meetings with both House Speaker Philip Gunn and Lt. Gov. Delbert Hosemann, Jackson Mayor Chokwe Antar Lumumba asked for support of Bell’s bill. The 1-cent sales tax increase was the mayor’s main ask of the Republican leaders, along with state bonds that could help the city make emergency repairs on its water distribution system.
Local and private legislation like Bell’s bill traditionally requires support from all or most lawmakers of the locality in question — an unwritten but decades long-standing rule inside the Capitol. In this case, not all of Jackson’s House and Senate delegates were on board with the measure.
After his meeting with Lumumba, Gunn publicly expressed concern about allowing Jackson to raise its sales tax, prompting questions about whether Bell’s bill ever stood a chance of passing out of the House chamber.
“It creates a precedent, if you will, that may be a dangerous area to go to as far as other cities around the state wanting to do the same thing,” Gunn told Scott Simmons at WAPT earlier this month. “And we may get in a situation where the tax burden (on Jackson residents) is just too great.”
Even had the bill passed the House, it faced a difficult road in the Senate. Hosemann, the Senate’s presiding officer, met privately on March 12 with four of the five state senators representing the city of Jackson. None of those senators — Democratic Sens. Sollie Norwood, Hillman Frazier, John Horhn and David Blount — told the lieutenant governor they supported the sales tax increase, according to several of the meeting’s attendees. Sen. Walter Michel, R-Ridgeland, could not attend the meeting but is said to oppose the sales tax increase.
“I am not in favor of (the 1-cent increase),” Horhn told Mississippi Today. “I think it will place too much of a burden on the city’s taxpayers. I believe it inhibits businesses from coming into the city. And it also hurts the efforts to retain and to expand businesses already here.”
Norwood told Mississippi Today he was “open-minded,” but that many of his constituents “have expressed disdain for (the sales tax increase), but I am still not done surveying it.”
Frazier told Mississippi Today he was still studying the possibility of the sales tax increase, “but I have not heard many positive comments about it from the folks in my district. They say it is regressive, and they already are paying an extra 1 cent for infrastructure.”
When asked if he supported the sales tax increase, Blount would not commit. “We are discussing all options, state and federal sources,” he said.
In another indication that the senators opposed the proposal: No one filed a Senate bill similar to Bell’s House bill that would garner legislative approval of the tax increase.
Lawmakers are working to end the current legislative session soon after this coming weekend, and it is unclear what funds, if any, they will appropriate to the city of Jackson. Republican leaders have remained tight-lipped as they are in closed-door meetings this week hammering out the state’s general fund budget.
The closing days of any legislative session are usually when lawmakers pass large packages that send state bonds to local governments. Neither Hosemann nor Gunn have publicly said they wouldn’t support a modest bond package for Jackson, and every lawmaker representing the city of Jackson in both the House and Senate support that effort.