Editorial 1/10/2014

Published 12:00 am Friday, January 10, 2014

CEDA could give municipalities boost in funding

On Tuesday, both the Cities of Batesville and Sardis by unanimous vote of their aldermen passed resolutions to support Citizens for Economic Development Act (CEDA) now before the state legislature.

Batesville, Sardis and other municipalities are joining the Mississippi Municipal League lobbying efforts to pass the CEDA bill that would give municipalities the right to levy a one percent sales tax.

CEDA has been well-written to protect Mississippians from having to pay additional taxes at the whim of city government.

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CEDA requires that the local, one percent additional sales tax can only be levied if approved in a municipal referendum where 60 percent of those voting approve.

CEDA is project-specific and time-limited. If a town needs money for a road, a bridge, a new water tower — whatever — the one percent sales tax approved in that town’s referendum can only used to pay for that project.

Once the project is paid for — or if the period of time for which the tax was approved expires — the tax ends, unequivocally.

CEDA comes at a time when many Mississippi municipalities are facing demands for infrastructure upgrade that they simply do not have the debt capacity to finance. Many are competing for an ever-dwindling supply of available grant funds to pay for mandated water and sewer upgrades. Others are struggling to provide police and fire protection, to build or improve streets. The list of costly infrastructure needs is long, and the means for municipalities to pay for them is very limited.

CEDA provides municipalities with a tool they badly need.

CEDA can save substantial taxpayer money on bonded interest projects because they can be paid off more quickly.

The Act comes before a state government that has shown much reluctance at approving any tax increase of any stripe. Instead, with no increased funding from the state legislature for many services in Mississippi, more and more responsibility gets pushed back down to local government. Witness the Highway Patrol turning over part of its Interstate patrolling duties and MDOT turning over more of its maintenance work to local governments.

State government is now dominated by the philosophy that tax decisions are best made at the local level. CEDA fits that perfectly.

Passage in this legislative session does not mean that anybody has to start increasing taxes. Only if local government identifies a need, and only if 60 percent of local voters voting in a local election approve, will a one percent sales tax be enacted.

“To me, it’s just another economic development tool,” one city official said during brief discussion Tuesday.

City leaders wisely endorsed CEDA Tuesday. State leaders would do well to listen to the local voices who seek this well-crafted legislation.