MAS urges caution on homestead exemption

Published 12:40 am Sunday, November 29, 2009

Attempts by the Legislature to increase Mississippi’s homestead exemption should be approached carefully and with consideration to county revenues, say officers of the statewide supervisors association.

Derrick Surrette, executive director of the Mississippi Association of Supervisors, and MAS legislative liaison Steve Gray say homestead exemption legislation is a top priority for MAS in 2010.

They are urging lawmakers to consider how county revenue lost from raising the exemption would affect the distribution of taxes.

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“If we lose revenue, the millage rate has to increase to keep services where they are,” Surrette said in a recent meeting in Brookhaven. “Once the millage increases, that affects everybody.”

Legislation introduced in 2009 that sought to increase homestead exemption for people 65 and older would have cost Lincoln County more than $200,000 had the bill passed, said county Supervisor Doug Moak.

Surrette said the potential millage increase counties might have to enact to cover for lost homestead revenue could be shifted to car tags, thereby increasing costs for those age 65 and older and everyone else, too. Financial gains earned by senior citizens with an increased homestead exemption could be wiped out by costly car tags, he said.

“We have to make sure we don’t put a burden on counties to where they don’t have to increase taxes on everybody, including 65 and older,” Surrette said.

Under homestead exemption, the state encourages people to own homes by exempting the houses from some property taxes. The state reimburses the counties and cities for lost tax revenues.

Under state law, for homeowners 65 years of age or totally disabled, there is an exemption on the first $75,000 true value.

However, property reappraisals in several counties pushed some property values over $75,000, which meant some elderly Mississippians paid taxes for the first time in years.

Also on MAS’ legislative priority list is the taxation of Section 42 housing built for low-income families. The association believes the taxation is not being done fairly.

Gray said more Mississippians are moving into Section 42 housing while using county and city services. However, the owners of those properties are not paying an equal amount of property tax.

“The problem is not a housing issue, it’s a tax equity issue,” he said. “Those properties are not being assessed in a fair and equitable manner. This is money the people can use.”

MAS is also working with cellular service providers to close loopholes in the tax system for funding counties’ 911 services. As more people drop traditional in-house phone lines and go cellular only, no 911 taxes are being collected on prepaid phones or voice over Internet protocol (VoIPS) phones which use the Internet for connection.

Additionally, anyone who travels out of county to purchase a cell phone has his or her 911 taxes paid to the county where the purchase originated, not the county where the person lives. Also, Mississippi does not meet federal guidelines for collecting 911 taxes, or it could draw down federal grant money to help pay for the system.

“We’re trying to find a way to at least start collecting on what we’re missing,” Gray said.

MAS also opposes the strengthening of Mississippi’s One Call System, the 811 number used to verify permission to dig in certain areas. The law is meant to limit the number of accidents or damage that comes with digging into buried utility lines.

Gray said MAS is suspicious of added teeth to the existing law, fearing that counties would be held responsible for higher penalties.

“We’ve had a problem with this because the bill wasn’t so much about public safety, it was about fines and fees and collecting money,” Gray said. “We’re trying to watch out for excessive fines and fees some groups might put out when they see the opportunity to do that.”

Lincoln County Supervisor Nolan Williamson said problems are caused on roadsides by erratic and unknown cables and pipes buried in county rights of way.

“Sometimes we’ll be working the roadsides and look back, and there will be wires everywhere,” Williamson said.

Improperly laid and unnoticed utilities are a problem in northwest Lincoln County as well.

“I just have to cut them and keep going,” said Supervisor Gary Walker.

Surrette said association will support its $20 million annual appropriation for the Local System Bridge Program, approximately $9 million for the justice system and hopes for a permanent revenue source for the Local System Road Program.