Among several items intended for the Mississippi Legislature this year, Vicksburg Mayor George Flaggs Jr. is looking for a new 1% sales tax.
“This is the second time we’ve introduced that,” Flaggs said. The request was put to the Legislature last year, “but it was pretty much last minute,” he said, and did not pass.
The value of the tax is to be able to borrow against it while making “substantial capital improvements to the city,” Flaggs said. Revenue from the tax is expected to be at least $300,000 annually, but the real value would come from being able to borrow long-term against the revenue, making its real value about $11 million to $15 million and possibly more in improvements to the city.
The list of items the tax could fund is lengthy. It includes infrastructure improvements, including streets; water system and water treatment, wastewater system and wastewater treatment; drainage; tourism projects; multi-modal transportation infrastructure projects for river, air, rail and interstate transportation; constructing, repairing, equipping and furnishing of municipal buildings and facilities, and purchasing land therefor; and for any other purpose authorized by law.
“These are long-term items that you normally don’t pay for within your (annual) appropriations because of general obligations,” Flaggs said. The items would be paid for through bonds over 10 or 15 years.
If the tax is approved by the Legislature, Flaggs intends to release a list of items to be funded, including resurfacing and repaving of roads, and additional funds for police and fire protection.
The mayor also wants to “significantly improve the outdoor look of the city” while improving city services.
The mayor said the water system improvements are necessary to expand the city’s population and businesses.
“We’re about to exceed our water capacity,” Flaggs said. Without increasing the city’s water supply, growth would be hampered, the mayor indicated. To increase housing and businesses, additional water is crucial.
Flaggs said the tax would be an alternative to raising property taxes, which he says he is adamantly against.
“It’s the best time to borrow,” the mayor said, as interest rates are low: “As low as they’ve ever been,” he said.
If approved by the Legislature, the tax would be put to residents of the city as a referendum. At least 60% of voters would need to approve the tax before it goes into effect.
The tax would be levied on the gross proceeds of sales or the gross income of businesses that pay a 7% sales tax or more, unless exempt or excepted. Among the exceptions are gross proceeds of sales or gross income of restaurants derived from the sale of food and beverages, gross sales or gross income of hotels and motels derived from the rental of rooms and sale of food and beverages, retails sales of food for human consumption, gross income of businesses engaging or continuing in the business of TV cable systems, subscription TV services and other similar activities, including but not limited to, cable internet services.
“Hotels and restaurants already have a (additional) 2% sales tax,” the mayor said, and the TV services are under a distinct franchise agreement that disallows raising their use taxes.
Flaggs will introduce the items for approval at the next Vicksburg Board of Mayor and Aldermen meeting scheduled for 10 a.m. Tuesday, Jan. 19.