Sen. Michel says Jackson not slighted by lawmakers during special sessionBy ANTHONY WARREN,
Jackson is getting just $50,000 of the $110 million in BP settlement funds doled out in the recent special session, but District 25 Sen. Walter Michel says the city got a good deal.
The Mississippi Legislature held a special session recently, where lawmakers passed bills creating a state lottery, divvying up internet use revenues and allocating BP oil settlement funds.
The city is set to receive $50,000 of the BP funds to repair the Hawthorn Drive bridge.
By comparison, Madison County received $8 million for the Reunion Parkway project; Rankin County received $8 million for the East Metro Parkway; and Hinds County received $2 million for the Byram-Clinton Parkway.
Michel said Jackson was left out, in large part, because lawmakers approved major legislation for the city in 2017.
During that session, the legislature approved the “capitol complex improvement district,” or CCID.
Under that bill, beginning in 2021, the city will receive an additional $11 million a year in sales tax diversions, for use specifically on improvements within the district.
“Jackson gets (that) annually. This (the BP allocation) is one-time money,” he said. “What would you rather have?”
The CCID was established to help offset Jackson’s costs for providing municipal services to state-owned buildings. The state is one of the largest property owners in downtown Jackson but pays no property taxes.
While Jackson is getting relatively little from the BP settlement funds, the city is getting the largest share of the $50 million in internet use tax revenues that were allocated.
Use taxes are essentially sales taxes placed on internet sales, such as purchases made on Amazon or Walmart.com.
While municipalities receive a portion of traditional sales tax dollars, such as purchases made at the local Kroger or Walgreen’s, they receive no diversions from the use tax.
In recent years, web sales have grown dramatically, while traditional in-store sales have dropped. As a result, cities have lost millions of dollars in sales tax revenues.
The legislature approved splitting the $50 million in use taxes three ways: 47 percent, or $23,850,000, will be diverted to cities based on their overall population; 47 percent will be diverted based on cities’ overall sales tax revenues; and six percent will be divided among cities equally.
The funds will be awarded to the cities in equal installments over the next four years.
In all, Jackson will receive $4,344,525, or 8.7 percent of the total use tax diversions.
Of that, $2,745,000 will be awarded to Jackson based on population, and $1.6 million will be awarded based on sales tax revenues.
By comparison, Ridgeland and Madison will receive $1,120,724 and $848,868 respectively.
“Jackson comes out better because of its people,” Michel said.
Jackson is the state’s largest municipality, with 169,148 people, according to the U.S. Census Bureau. Broken down, the city will receive $16.23 per person based on the population-based diversion.
Madison’s population-based allocation breaks down to about $14.52 per person and Ridgeland’s breaks down to $15.54, based on Sun calculations.
Michel said future use tax diversions to Madison and Ridgeland will likely increase as sales tax revenues there grow.
The Ridgeland Costco, for example, will generate another $7 million in sales tax dollars for the state, significantly increasing its use tax diversion.
“It’s the best scenario for my district. Northeast Jackson, Madison and Ridgeland greatly benefit,” he said. “I don’t feel Jackson got slighted at all.”