Northsiders should be able to breathe a sigh of relief.
Despite drops in revenue due to the coronavirus, leaders in Ridgeland and Jackson aren’t planning to raise taxes for the 2021 fiscal year.
Meanwhile, Madison did not see a drop in sales tax revenues due to the pandemic.
“Revenues are not as low as we thought they were going to be,” said Jackson Mayor Chokwe Antar Lumumba.
“When the budget hearings begin, we will know better where things will be, but no one has led me to that conclusion,” he said, referring to whether the city would be raising taxes.
The mayor said he would have a more definitive answer after budget talks were under way.
In Ridgeland, Mayor Gene McGee, said tax increases were off the table altogether. “We will not be raising taxes for the new budget,” he said. “The tax levy will be the same as it has for the last 31 years.”
Madison Mayor Mary Hawkins Butler couldn’t be reached for comment.
Jackson’s current millage rate is 63.03 mils, according the Mississippi Department of Revenue’s website. For a home valued at $300,000, property taxes would be about $1,891 annually. The city last increased its ad valorem assessment in fiscal years 2017 and 2015.
Ridgeland’s millage rate is 20.03 mils, while Madison’s is 28.8. The tax rates for those municipalities have remained the same for years.
This spring, city leaders were bracing for the worst, as businesses were closed for weeks to stem the spread of the coronavirus. With businesses being closed, sales tax revenues were expected to plummet.
Revenues did fall for most cities, but not nearly at the levels expected.
In Jackson, general sales tax revenues through the end of June were off by just under $1.2 million, while revenues from the convention center tax fell $547,000, revenues from the city’s tourism tax fell $361,000, and revenues from the city’s infrastructure tax fell $267,000.
In Ridgeland, sales tax figures were down about $112,000.
Ward Two Councilman Melvin Priester said the biggest challenges for Jackson this year will be how to plug gaps with the convention center and with the water/sewer billing department.
“That’s where we have bills to pay and we’re not generating the revenue that we need,” he said.
The convention center tax is placed on certain hotels and restaurants in the capital city. Revenues from that tax are used to cover debt service on the city’s convention center bonds, with any remaining used to supplement convention center operating costs.
The city issued around $65 million to build the Jackson Convention Complex, with payments due on March 1 and September 1 of each year.
Jackson made a $3,075,968 payment in March, which was slightly more than the $3,049,443 in convention center tax revenues Jackson had brought in at the time. Jackson had to dip into its reserves to make the September payment of $1,200,219.
“Debt service is going to be a problem,” Priester said. He said that because convention center tax revenues are down so much the city will have to dip into its general fund to cover the coming year’s debt service and to supplement the center’s operations.
Water billing poses another challenge. The city is bringing in about $20 million less a year than it should in water/sewer usage fees, due to complications with its billing system.
Problems stem from the city’s Siemens contract. The firm was brought on years ago to completely gut and overhaul the city’s billing system.
Work included replacing all of Jackson’s analog water meters with electronic ones, creating and install new software at the city’s billing office, and installing a new communications network that would transmit usage data from the meter to the billing office.
In some cases, meters are not working, while in others, the network is unable to transmit data from the meter to the billing office.
Because of that, thousands of bills are not going out, and thousands of customers are unable to pay.
The city has had to use general funds to help prop up the water billing office, so bonds can be repaid and so water repairs can be done.
To boost revenues, the administration is planning to hire private contractors to serve meter readers, at least temporarily.
“If we can get that contract brought to us at the first meeting in August, and get those people working, we hope to be able to see a bounce in water/sewer revenues,” Priester said.
Budget talks for most cities are expected to begin in the coming weeks. Under state statute, budgets must be approved by September 15, and will go into effect on October 1.