The Mississippi Municipal League is staying neutral so far on the push by some Republican leaders to eliminate the state’s personal income tax.
Shari Veazey, executive director of the association that represents Greenwood and almost 300 other Mississippi towns and cities, said there were concerns about the tax-swap proposal that passed the House but died in the Senate during the recently completed legislative session. However, MML “could not come out and oppose it because we did the math and it did keep cities whole if they had passed the bill as it was written,” she told the Greenwood Rotary Club Tuesday.
The measure, which was prominently backed by House Speaker Philip Gunn, would have phased out the individual income tax over 10 years and cut the sales tax on groceries in half while raising the general sales tax on most other purchases from 7% to 9.5%.
Veazey said since cities depend heavily on the slice they get of the state sales tax collected within their boundaries, there was a lot of angst, particularly among smaller municipalities, over reducing the tax on groceries to 3.5%. A complicated formula in the bill, though, was designed to offset any such losses by increasing the cities’ share from other taxable purchases.
She said there were also concerns about what impact a 9.5% general sales tax rate might have on the possibility of funding capital improvements through a local option sales tax. For more than 30 years, MML has unsuccessfully lobbied the Legislature to give towns and cities the authority to implement a 1% sales tax to finance specific projects, such as repairing roads or upgrading sewer systems, if 60% of voters in that municipality approved.
Veazey said a 9.5% general sales tax rate would probably close that avenue of funding permanently.
Greenwood Mayor Carolyn McAdams, who introduced Veazey, said that elimination of the income tax also would end a method that the city has used in recent years to collect unpaid fines. Under current state law, local governments can try to attach part of an individual’s state income tax refund to settle an outstanding debt.
“It’s been a good mechanism for Greenwood,” said McAdams, who is in line to become the president of MML in 2024 if she wins re-election in June as mayor.
Lawmakers are expected to further study the tax-swap proposal and consider the issue again in 2022. Gov. Tate Reeves wants Mississippi to join nine other states that don’t have an income tax, although he has not supported raising other taxes to offset the potential impact on state or local government budgets.
“The Municipal League will look at what they’re proposing,” Veazey said. “If cities are kept whole, then we probably will not oppose it.”
She also summarized a handful of bills supported by MML that were enacted by the Legislature this year. One dealing with permitting the use of golf carts and other low-speed vehicles on municipal streets could soon come into play in Greenwood.
Previously, according to Veazey, whenever a city wanted to grant this permission, it had to seek special legislation from the state that only applied to that one municipality. Under a new state law, any Mississippi city can authorize low-speed vehicles riding on city streets as long as the vehicle is registered with that municipality by a licensed and insured driver.
Presently in Greenwood, golf carts and the like have been allowed to ride on city streets only for special events, such as downtown festivals or the city’s annual Christmas parade. The ban against their general use, though, is frequently ignored, often by under-age drivers.
McAdams said some members of the City Council want to lift the restriction on licensed drivers in lower-trafficked areas of town. “The council wants it, so we’re probably going to do it,” she said.
- Contact Tim Kalich at 581-7243 or tkalich@gwcommonwealth.com.
