Leveraging more funds for immediate infrastructure work is the main reason behind why the city of Jackson wants to extend the infrastructure sales tax indefinitely.
Jackson voters overwhelmingly approved implementing the one-percent sales tax in 2014. The assessment is added to most retail transactions in the city, excluding groceries and medicine.
Since then, the tax has generated more than $80 million for road, water, sewer and drainage improvement, and is expected to generate another $200 million during its remaining 14 years of life.
However, with the tax slated to sunset in 2034, and with billions of dollars in road, water, sewer, drainage and bridge needs, city officials would like to see the assessment extended indefinitely.
Local leaders argue that doing so would give the city more flexibility in addressing immediate needs, including being able to use the revenue stream to borrow tens of millions in infrastructure bonds.
With just 14 years remaining on the tax, Jackson is limited in the amount of money it can borrow.
“The problem with leveraging funds now is that the timeframe limits the amount we can borrow to address immediate needs,” Mayor Chokwe Antar Lumumba said.
The tax generates approximately $14 million a year.
The administration previously announced plans to issue $40 million in infrastructure bonds to make repairs across the city, using a portion of one-percent revenues to retire the debt.
The city would allocate $4 million a year in one-percent revenues to retire the debt, leaving Jackson with just $10 million a year to expend on annual needs, according to the Clarion-Ledger.
Ward One Councilman Ashby Foote agrees that the tax should be extended indefinitely, and supported a resolution recently to ask state lawmakers to do away with the tax’s sunset clause.
The 2020 legislation is under way, and doing away with the sunset provision was one of several resolutions passed by the council as part of its 2020 legislative wish list.
“We can do more work on the front end that will benefit the city for years to come,” Foote said.
The resolution was approved only after it was amended to say that any plan to extend the tax would have to voted on the general public.
“We want to send the right signal to our constituents that with anything we do, we want to make sure the voters are in the loop and have a say so,” said Ward Four Councilman De’Keither Stamps.
Stamps was particularly concerned about doing away with the sunset provision, saying voters approved the tax with the understanding that it would eventually expire.
Local lawmakers have differing opinions on the issue as well.
District 25 Sen. Walter Michel shared Stamps’ concerns. Also, with the tax not set to expire for another 14 years, Michel believes it’s too early to ask lawmakers for any type of extension.
District 29 Sen. David Blount, on the other hand, supports repealing the sunset provision, agreeing with Lumumba and Foote.
Since taking effect, the tax has generated just over $82 million. Of that, the city has already allocated $93.7 million, leaving the city with a roughly $12 million deficit.
Obligations include $13.8 million that was part of the first-year capital improvement plan, passed in 2015, $4 million for pothole repairs in March 2016, and $6 million for the North State Street and West County Line Road TIGER projects, which was allocated in 2017.
One-percent funds have also gone to street repaving contracts ($34.5 million), emergency water and sewer repairs $14 million), and consent decree program management $5.4 million).
Of the $14 million given for water and sewer repairs, $6.985 million was to reimburse the city for emergency repairs made between September 2016 and March 2018, while $7 million was a loan the city must pay back.
Funds are governed by a 10-member oversight commission. Under state statute, the commission is responsible for drawing up a master plan and ensuring that funds are spent in accordance with it.