Thursday, January 26, 2006
Active legislative session stirs interest locally
By SUE WATSON
A new grab for tax revenue alternatives in the Mississippi Legislature, stirred in part by the debate over a bill to roll back grocery sales taxes and increase tax on cigarettes, provides one of many clues that there is a move on to tax-shift this year.
The activity in the legislature regarding this and other funding issues is really going fast this year, according to Gary Anderson, consultant to the Marshall County Board of Supervisors.
Anderson, in the board room last week to give an activity report to supervisors, was not the only one concerned about tax shifting. Tax assessor Ronnie Johnson made an appearance later in the meeting to ask supervisors for a resolution regarding certain tax legislation.
Sales tax provides the largest state revenue with payroll taxes second and industry the third biggest provider of money to the state coffers, Anderson said in a private interview during the meeting.
In his report, Anderson described the legislative session as “fast and furious.”
“Activity is unprecedented for them to come in and roll up their sleeves and go to work so fast,” he said.
He alerted supervisors to some restrictions in a bill covering imminent domain. Economic development areas will be impacted most if the bill passes, he said. The bill redefines what is exempt from imminent domain.
Another bill would increase the tax credits on some properties and would involve loss of local ad valorem tax revenues, he said.
“I have focused on two bills that will help Marshall County,” Anderson said. “The first bill, by Rep. Ricky Cummings and Sen. Nicky Browning, will reinstate the low income housing tax credit as part of the basis of determining income.”
The second bill, sponsored by Rep. Leonard Morris and dubbed EDA for Mississippi, will create a $20 million fund for local economic development around the state.
The bill, in present form, would require a 30 percent match in cash or in kind, to help communities plan, lay infrastructure, buy land, and pay for environmental assessments and engineering before an industry commits to the project, he said.
Anderson said he is working on language for the bill that would make sure Marshall County meets the criteria in the bill.
Anderson is working with Leland Speed, director of Mississippi Development Authority, and Bill Renick, director of Marshall County Industrial Development Authority, to see if any Community Development Block Grant money is available for improvements on Chulahoma Road. Data gathering will help determine whether a CDBG application would be feasible, he said.
Anderson is also looking into the feasibility of applying for money to build an Alcohol and Drug Rehabilitation and mental health treatment facility in Marshall County.
Anderson said he would work to get a recovery center here if supervisors support the need for a facility with a resolution and if funds for it are in this year’s bond bill.
Johnson followed Anderson with a request for a resolution to give to the local delegation regarding several bills in the legislature.
He said a move in the legislature to remove effects of SB 3100 that went into effect in April 2005 should be supported by the board of supervisors.
SB 3100 gave owners of low-income affordable housing units a tax break that would cause the county to lose $260,000 a year in revenue. SB 2058 and HB 644 would repeal these tax breaks to apartment complex owners who have already been given federal incentives, he said.
“These two bills would put it back to what it was before,” Johnson said.
“This loss in taxes would basically be put back on the homeowner. Besides your family and religion, the next most important thing in your life is your home. Homeowners are struggling now to pay their heating bills and insurance due to Hurricane Katrina. If these people (owners of affordable housing complexes) are given these tax breaks, it would make them virtually tax exempt.”
Johnson said extra millage would have to be levied to make up the $260,000 in tax revenues, money the county needs to operate.
“DeSoto County lost $675,547 in 2005 school and property taxes for city and county government from the tax reduction in SB 3100,” said Johnson citing a news article.
Another bill, HB 625, before the legislature worries Johnson. It would exempt all commodities, products, goods, wares, merchandise held for resale by any manufacturer, distributor or wholesale or retail merchant from ad valorem (beginning of the year inventory) taxation. The exemption would hurt cities the most since they rely on these taxes, Johnson said.
He estimated passage of HB 625 in its present form would cost the county $723,000 in revenue next year and the City of Holly Springs would lose $147,000.
The legislation would give most businesses a tax break and mainly would affect the cities, Johnson said.
“If the grocery sales tax cut gets passed (SB 2310), where are the cities going to get money to provide police protection, fire protection and money for schools?” asked Johnson. “This system has worked for many years. Merchants are smart enough to go into business and they know what they face in taxation.”
Johnson said home and property owners have to face increasing prices already and would be the only tax base left for cities and counties to call on for revenue.
Merchants can raise the cost of their goods when prices go up, but homeowners have no one to pass the extra tax millage off to, he said.
Johnson said it is the duty of the tax assessor to advise the board on how legislative changes would affect revenues, but he has nothing to do whatever in setting the millage. The board of supervisors alone, does that, he said.
“If that bill (HB 625) gets passed, you are going to have to raise the tax by about five mills,” he told supervisors.
Johnson alerted supervisors to another house bill (HB 75) which if passed would place heavy burdens on tax assessors.
The bill sets July 1 as the date assessors must provide notice to taxpayers when their ad valorem taxes will be increased over the previous year due to improvements made on their property. Tax assessors would have to notify each owner by letter which would add a tremendous burden to an already stretched staff at the office, he said.
The reassessments would be mandatory and take one to two additional employees to carry out the mandated changes, Johnson said.
HB 75 would be applicable anytime anyone’s agricultural land-use values change, a new roof is put on a house, a road is paved or a carport is added or enclosed and for many other reasons, Johnson said.
If Johnson has to hire additional workers to make the mandated reporting changes, it would cost taxpayers in increased ad valorem fees to pay for additional employees and cost of sending out notices, he said.
“The catch to this thing is, before y’all equalize the rolls the board of supervisors shall verify whether or not the tax assessor provided that notice,” Johnson said. “You’re talking about days and days of work. So, House Bill 75 and House Bill 625, I don’t think you all want these passed.
“Every time somebody gets a tax break, somebody else had to make it up,” he continued. “If you take the tax off business, you are going to have to put it back on the homeowners. Everybody has got to pay their fair share or somebody else is going to have to pay for it and it will be put on the homeowners.
“When you give industry a tax break, you get jobs and 10 years later you get their taxes. Even when granted an exception, industry still is taxed for fire protection, schools and junior colleges.”
County administrator Larry Hall suggested the board contact their representatives and senators about these bills rather than sending a resolution.
“Just call your representative,” Hall said. “The silent majority rules, anyway.”
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