Sunday, January 21, 2018

With CEDA everyone chips in

One of the best things we can ever have is options. Options offer a different course of action in a given situation. The primary difference between the rich and the poor is one has a multitude of options and the other is very limited. Having options can make the difference between success and failure, prosperity and poverty, or superiority and mediocrity. There is legislation that will be introduced this legislative session that can be a great benefit to cities like Vicksburg and provide a much needed option to pay for capital improvement projects such as infrastructure repairs, upgrades, or economic development projects.

The Citizens for Economic Development Act (CEDA) would allow local officials to place on the ballot a referendum that would raise a city’s sales tax by no more than 1 percent to pay for such projects. Approval will require a 60 percent majority and the project would have to be specified on the ballot. Passing this legislation would mean putting power back in the hands of the people of a community. There are lots of needs in Vicksburg, but the challenge is finding a way to pay for such ventures. The answer currently is issuing a bond or raising taxes. According to Kosciusko Mayor Jimmy Cockcroft, “people usually don’t want to pay higher property taxes and a local sales tax would provide money for projects”. He is absolutely correct in my opinion. The problem with raising property taxes is that everyone doesn’t own property and only a percentage of people are contributing to footing the bill. Wesson Mayor Alton Shaw stated his town needs about $500,000 for road pavement. He estimated a property tax would generate about $20,000 a year, but a 1 percent sales tax increase from his tax base would bring about $100,000. With a sales tax increase, everyone chips in. Whether you are purchasing a house, car, or hamburger, taxes from your purchase will contribute to paying off the cost of a project.

Passing this bill would be a great benefit for cities. Under current state law, cities must go to the Legislature on a case-by case basis to seek approval for a local sales tax increase. Some cities have been successful and some have not. This also can be a long process that often hinders production. Why not allow the residents of a city decide when to invoke a tax increase for projects that they deem necessary? Why borrow money over a twenty-year term for projects with a 10-year life? Why continue to put off improvements that need attention now?

It is always good to have options. CEDA is a very low risk option and it can help Vicksburg make improvements without creating any new debt. The best thing about this is when the project is complete, the tax goes away. I read where some lawmakers are making excuses about the tax not being fair to out-of-town residents. The point of a sales tax is to make money from purchases. I know many people that patronize Monroe, Louisiana at their tax rate of 9.99% and their economy is doing well. People will always pay for good products and excellent service. Levying a temporary 1% tax to pay for specific projects makes sense if your goal is being efficient, responsible, and proactive. The best thing about options is that you may never utilize them, but there is a comfort in knowing you can act when the need arises. I encourage you to learn more about this bill and get involved. Your legislators want to hear from you.

Alderman Willis Thompson
Follow Alderman Thompson on Twitter @AldermanWillisT