Analysis: Miss. supes discussing county budgets

Published 12:00 pm Wednesday, June 19, 2013

The core issue is money. Counties, just like municipalities, are faced with dwindling tax bases and rising costs. Something has to be done without harm to the taxpayers, says Steve A. Davis, director of governmental affairs for the Mississippi Association of Supervisors.

“Local governments are strapped,” Davis told The Associated Press. “Everybody is looking for alternative ways to provide services, and no one wants to raise taxes.”

The MAS convention in Biloxi opens Wednesday with a presentation by House Appropriations Committee Chairman Herb Frierson, a Republican from Poplarville.

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Frierson said he understands county officials are concerned about how revenue collections affect local reimbursement for housing state inmates, homestead exemption and local road and bridge programs.

Davis said counties are hoping for help with anticipated higher health costs with implementation of 2010 federal health care law. He said counties also want Mississippi lawmakers to keep a rural bridge replacement program funded as they did this year with a $20 million appropriation.

Frierson said the bridge replacement program is also popular with lawmakers.

“We’re hoping revenues continue to keep improving,” he said.

Frierson said lawmakers know local governments are struggling, and increasing the property tax burden on citizens is not popular.

“I think my term as appropriations chairman will be running around sticking fingers in dikes,” Frierson told the AP. “I think we are going to catch our wind at some point, but for now we’re going to muddle through this.”

Frierson said tax collections have shown some improvement and the question is whether revenue growth can be sustained through this fiscal year that ends June 30 and into the next.

Homestead exemption continues to be a concern to local government as Mississippi’s aging population takes more property off tax tolls. Under homestead exemption, the state encourages people to own homes by exempting the houses from some property taxes. The state reimburses counties and cities for lost tax revenues, although local officials say payments have not kept pace with actual losses.

Mississippi homeowners who are 65 or older or totally disabled, who are eligible for the homestead exemption, can claim a total exemption from property taxes on up to 160 acres or the first $75,000 of the true value of their home, whichever limit is reached first.

The 2013 Legislature appropriated $81 million to homestead reimbursement. Counties, cities and school districts asked for nearly $90 million.

When supervisors head back home after their conference, they will have only a few weeks to prepare a new budget. Counties’ new fiscal year starts Oct. 1.

Davis sees a ray of sunshine in the federal Marketplace Fairness Act, which would allow states to more uniformly tax online sales. The act was approved by the U.S. Senate in May and awaits House consideration.

Mississippi could realize an estimated $303.2 million in sales taxes from online purchases, according to the National Conference of State Legislatures. That is based on the level of Internet sales from last year.

Mississippi and other states would have to write laws to require that the sales tax be collected at the point of delivery rather than at the point of sale.

States have pursued an approach to collecting e-retail sales taxes since a 1992 U.S. Supreme Court ruling barred them from seeking such revenues from businesses without a physical presence within their borders.

“We would hope, if Congress passes the act, for a part of the money to come to the local level, a percentage to local governments,” Davis said.