Barring some sort of miracle in a yet-to-be-called special session of the Mississippi Legislature, Lowndes County will lose its 2-percent restaurant sales tax and, with it, quite possibly the Columbus-Lowndes Convention and Visitors Bureau that relies almost exclusively on those funds.
Without an extension beyond June 30, when the 32-year-old tax sunsets, local tourism and economic development will lose, at minimum, roughly $2 million in revenue from the tax, and that’s if a new restaurant tax is approved in next year’s legislative session.
Since a dispute over which restaurants should be required to collect the tax from its customers wound up killing a bill that would have extended the tax for four more years, there has been speculation about how the loss of that tax revenue will affect tourism and economic development.
The folks in Southaven don’t have to speculate what that might look like, however.
They’ve lived it.
Last year, Southaven, a city of 53,000 in DeSoto County, saw its 4-year-old, 1-percent restaurant sales tax sunset in conditions similar to those that spelled the end of the Lowndes County restaurant tax two weeks ago.
Southaven Mayor Darren Musselwhite said the only thing that changed was the politics.
“In 2015, there were some changes with the (local) delegation in the House of Representatives,” Musselwhite said. “A few of the new legislators would not support the tax extension without a new referendum. The last referendum we had, 74 percent of the voters supported the tax, but for some reason they wouldn’t move forward.”
Manly Barton (R-Moss Point) said he knew Southaven’s extension bill was in trouble.
“I didn’t even want to bring it to the floor,” said Barton, chairman of the House Private and Local Committee, where these tax bills originate. “If you don’t have your own delegation behind it, the rule of thumb is you don’t let it out. But eventually, I did bring it forward.”
The results were almost comical, Musselwhite said.
“The representative who presented the bill on the floor was against it,” Musselwhite said. “Sure enough, someone asked after she had presented the bill on the floor if she was for the bill and she said, ‘No’ and the bill died. We told our legislators, ‘We’re at your mercy. Tell us what you want us to do.’ So we came back with a bill that said we would have another referendum. That died in the House, too. It was a nightmare.”
‘What was the point?’
Since Southaven’s restaurant bill went into sunset on June 30, 2017, the city has lost $1.6 million in revenue from the tax.
In Southaven, the money from the tax is used for tourism and parks, which often overlap.
“A big part of our tourism is parks-related in our baseball facility,” Musselwhite said. “Snowden Grove Park is one of the best baseball facilities in the South and it’s our biggest source of tourism dollars.”
Losing that revenue, Musselwhite said, has impacted the city’s budget in other ways, too.
“What that meant is that the projects we had planned for tourism and parks went back into the general fund where they competed with other capital improvement projects,” he said. “Our city budget is $67 million, so when you take $1.6 million out of that, it’s a tremendous loss.”
Even in tax-wary DeSoto County, Musselwhite said he’s still at a loss to understand what happened.
“The thing I don’t understand is why in the world you would get rid of revenue that is paid, in large part, by people from out of your (area)?” he said. “Whatever percentage that winds up being, and for us it’s probably a large percentage, that’s money that doesn’t have to come from local sources and local taxpayers. We just gave that away, and I still haven’t found anyone that could explain why that was a good thing.”
The good news for Southaven is the Legislature passed a new 1-percent restaurant tax for the city in this year’s legislative session.
“We’re grateful,” Musselwhite said. “We have a great baseball facility and a successful amphitheater — we just sold out a Dave Matthews concert recently. We want to build on that, plus we’re planning for a new performing arts center, an improved soccer park and a lot of other things. All those plans basically stopped when the tax ended last year.
“Now that we have the tax again, we’ll be able to pursue those projects,” he added. “Even so, I still shake my head. That’s $1.6 million of revenue we lost. What was the point?”
Slim Smith is a columnist and feature writer for The Dispatch. His email address is [email protected].
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