R’land, municipal league campaigning for portion of sales tax
The city of Ridgeland is partnering with the Mississippi Municipal League and its 292 member cities across the state with a new campaign encouraging legislators to “Balance the Scales with Internet Sales.”
This partnership is an effort to support the diversion of internet sales tax back to municipalities in any legislation for infrastructure funding that might be considered during a special session.
The ability to provide quality public infrastructure is critical to a city’s economic vitality, according to Ridgeland officials.
The amount of sales tax revenue a city collects directly impacts its ability to provide a better quality of life for residents. Cities receive 18.5 percent of sales tax revenue, which allows them to pay for police and fire protection, roads, garbage and more.
Ridgeland is one of many cities attempting to figure out how to preserve its residents’ quality of life in the wake of a growing e-commerce industry. Along with the Mississippi Municipal League, Ridgeland is working to bring a portion of internet sales tax back to the city.
Sales tax revenue makes up 52 percent of Ridgeland’s general fund for 2018 and 48 percent of estimated actual expenditures for the general fund for 2018, according to Mayor Gene McGee.
Ridgeland has brought in approximately $13 million in sales tax revenue each year for the past five years. The estimated sales tax for 2018 is $11,751,545.
In 2018, Ridgeland will spend $17,126,111 on Public Safety and Public Works alone.
The city’s general fund will also fund $4,219,084 for general government operations, including administration, community promotion, community development and more; $55,000 for health and welfare, including mosquito control; $2,443,099 for Parks and Recreation and library; and $274,841 for transfers out to projects.
Because of the recent Supreme Court decision requiring sales tax to be diverted to the state for Internet sales, more than $100 million could be brought into the state due to online purchases.
However, a portion of the funds are not required to be diverted back to the cities in which those purchases were made.
At a recent meeting of the Ridgeland Board of Aldermen, a resolution passed in an effort to encourage the State Legislature to divert a portion of Internet sales tax to municipalities.
According to Ridgeland officials, the goal is for the Legislature to treat Internet sales tax the same as traditional sales tax and divert at least 18.5 percent back to the cities based on the point of delivery of the products sold or set aside a portion of all use tax to be diverted to cities on a per capita basis to be used for water, sewer and street infrastructure.
The resolution states that cities, towns and villages in Mississippi are responsible for over 23,000 street miles, including the approximately 180 miles of streets in Ridgeland that must be maintained.
The resolution also states that municipal governments in the state provide water and sewer services to over 50 percent of the citizens in Mississippi.
McGee said that cities and towns are the economic engines of the state.
“If we can improve our infrastructure the state only stands to gain,” he said. “The climate for economic development and job creation will be improved and retail should grow, increasing overall sales tax collections for the state.”