Restaurant tax: Conflicting ideas fuel efforts to revive restaurant tax


Robert Smith, left, and Harry Sanders

Robert Smith, left, and Harry Sanders


From left, Nancy Carpenter, Gary Chism, Jeff Smith and Chuck Younger

From left, Nancy Carpenter, Gary Chism, Jeff Smith and Chuck Younger



Slim Smith



Several issues still need addressing if the city or county hope to see a 2-percent restaurant sales tax restored after it expires June 30. 


Seemingly the main issue is whether local and state leaders can agree on whether the tax should include a revenue threshold, or "floor," that would only require restaurants/businesses that log at least $325,000 in prepared food and beverage sales annually to collect the tax. Another issue is whether Columbus should pursue its own restaurant tax without the county's participation. 


In the two weeks since a bill to extend Lowndes County's 2-percent restaurant sales tax died in conference committee as the 2018 Mississippi legislative session ended, local officials have been mulling their options. No action has yet been taken, though, to resurrect the tax meant to help fund tourism, parks and economic development. 


Even before the end of the session, Columbus Mayor Robert Smith had offered to accept a change to the bill agreeing to keep the $325,000 floor that had been part of the legislation since its inception in 1986 -- despite the city council and county board of supervisors agreeing in a joint resolution earlier this year to ask legislators to remove it.  


That compromise led to informal talks between the mayor and Rep. Jeff Smith (R-Columbus) over new legislation that would create a city-only tourism program that would only apply to restaurants/businesses within the city limits. 


The mayor said that option remains on the table, but the city council has yet to address a way to put such a plan in motion. 


"My thing is that if our legislators aren't going to take out the ($325,000) floor, we'd be crazy to send anything down there that says otherwise," Mayor Smith said. "Two-million dollars is at stake here. That's what we have to remember. So if the only way to get this tax back in place is to have the floor, that's what we would have to do. If that means the county isn't a part of it, that's their decision." 




Keeping the CVB 


If the city were to move forward with its own tourism program, the mayor said he would favor using the existing Columbus-Lowndes Convention and Visitors Bureau to continue administering the funds earmarked for tourism. 


The CVB board -- which currently features four city appointees, four county appointees and one city-county joint appointee -- would have to be changed in the event the CVB becomes a city-only entity, the mayor said. Because the CVB was created by its own legislation, another state-level bill would have to be passed before the board make-up could be altered. 


"Look, (CVB Executive Director) Nancy Carpenter and I have had our differences, but with her contacts and experience, we'd be foolish not to use that," Mayor Smith said. "We'd have to do something about the board because if it were to be city only, we'd need a board with city people on it. But as far as running tourism, I still think the CVB is the best way to do it." 




County still wants tax with no floor 


Lowndes County Board of Supervisors President Harry Sanders said the county wants to remain a part of the tourism operations. He said he is still committed to making the tax applicable to all restaurants in the county regardless of sales. 


"The county has as much interest in tourism as anybody," Sanders said. "We want to keep it exactly as it is, with the tax in place like it's always been. ... The only difference is taking away the floor because having that floor doesn't make any sense. That's been our position all along and I don't see any reason why it would change." 




Trying again next year 


As it stands, the restaurant tax will expire later this year, and the city or county would have to individually or jointly ask the Legislature to restore the tax when it reconvenes in January -- meaning the tax revenue is likely gone for at least a year. 


If the city and county send different resolutions to the Legislature next year, it would most certainly kill the effort of either party, a point that was made clear this fall when the council and board of supervisors offered differing resolutions before finally agreeing to a joint resolution in December. 


Sanders said supervisors have no plans to take action on the tax in the foreseeable future. 


"I would imagine we would take it up in August or September," Sanders said. "We'll draft a resolution for the tax and I expect it to be the same one we sent to Jackson this year. I can't see any reason to do anything before then." 




Short-term solution? 


Another possibility, Rep. Smith said, was to agree on what he called a "short-term solution" that could be presented if Gov. Phil Bryant calls for a special legislative session. 


There has been speculation that Bryant will call for a special session to address the state's road/bridge infrastructure issues or K-12 education funding. Smith said if the special session is called, the restaurant sales tax could be added to the agenda. 


"It's something we could do," Rep. Smith said, acknowledging the key local legislators would have to yield on their positions or reach a compromise. 


In the conference committee, House members Gary Chism and Jeff Smith demanded that the $325,000 floor be added to the bill. Sen. Chuck Younger rejected the amendment, creating the impasse that doomed the bill. 


Rep. Smith said there might be room for a compromise. 


"I think we could possibly work out something that changes the floor to $200,000, maybe $100,000," he said. "If we could agree on that and get it through the special session, we could have the tax in place through June 2019. That would allow us to come back in January with another bill to take its place when it sunsets." 


Younger said that until he hears from the city council or board of supervisors, he's not yet willing to alter his position. 


"I'm not so much sticking to my guns as saying that I want to hear what the local representatives have to say about this," Younger said. "What I can tell you is that I have not heard from one person in my district who disagreed with what I did. They were telling me they were glad I didn't give in." 


Younger said he's doubtful that the tax would be taken up in a special session. 


"I can't see it, but maybe Jeff has the governor's ear," Younger said. "We'll see." 


Sanders was even more skeptical. 


"That's wishful thinking as far as I'm concerned," Sanders said. "If the governor brought a local tax into a special session, he'd be opening up a Pandora's Box. He'd be crazy to do that, and I'm convinced it won't happen." 


By law, the governor must call any special session within 21 days of the close of the regular session, which means the session would have to be called by April 23. 




Getting together 


Sanders said he has not spoken to the mayor about the future of the tax. 


Younger, meanwhile, said he believes no action should be taken until he and the rest of the local delegation meet with the city council and supervisors. 


"What's the point of doing anything until we've done that?" Younger said. "We all need to get in a room and hammer out something we can agree on."


Slim Smith is a columnist and feature writer for The Dispatch. His email address is [email protected]



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