Thursday, February 16, 2012
Capital improvement plan flies
By SUE WATSON
The Holly Springs Board of Aldermen voted unanimously to ask the Mississippi Legislature for authority to add a 1 cent on the dollar sales tax.
The revenue, if authorized, would eventually produce $8 million to purchase equipment such as a town weather siren, heavy equipment for departments and police vehicles.
Mayor Andre’ DeBerry urged the board last year to approve $21 million, with this $8 million to be funded by local and private legislation. The remaining $13 million he recommended would be used to upgrade streets and sidewalks and would be paid for with bonds.
These improvements were recommended in a study, authorized by the board of aldermen last year, to address problems of deterioration of infrastructure and ways to pay for equipment outside the usual ad valorem tax route which is used to support the city’s operations budget.
The matter of seeking a local and private bill, for the $8 million, was brought up following boardroom discussions of a variety of needs. Those included replacing the aging fleet of police patrol cars, the absence of a tornado warning system, a new fire station, and some heavy equipment needs of departments.
In asking for approval to seek the additional 1 cent general sales tax, DeBerry said cities are using these means to make their capital budgets because the ad valorem tax base brings in only enough revenue to pay for operational costs such as salaries and benefits, repairs, and maintenance.
“This is not a Cadillac plan,” DeBerry said. “Every city around us is doing capital improvement plans and we can do the same thing. We don’t have the funds to purchase equipment out of our operating budget.
“We’ve got to create our own opportunities to provide services and to grow this city.”
DeBerry said the board has recognized the need for capital improvements but has not taken the steps to do it.
Aldermen asked if specific items had to be listed in the local and private bill.
“When they pass this, it has to happen,” the mayor said.
Currently the city collects a 7 cents general sales tax and a 2 cents tourism tax. The tourism tax is levied on fast food, restaurants, and motels. The city is generating an annual income of about $1.2 million from the general sales tax and about $130,000 a year from the 2 cents tourism tax, the mayor said. Half the tourism tax goes to fund tourism and the other half goes to retire debt on the Eddie Lee Smith Multi-Purpose Building.
If the Legislature approves this local and private bill request for a 1 cent on the dollar general sales tax, in the current business environment the city could bring in about $171,428 a year from this additional tax. It will take years to raise the $8 million with this 1 cent general sales tax.
With discussion ended, the board of aldermen voted unanimously to seek authority to raise $8 million in revenue from a 1 cent on the dollar general sales tax levy.
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