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City to draft resolution supporting CEDA bill

January 16, 2013


Starkville aldermen directed city staff to draft a resolution in support of the Citizens for Economic Development Act to be presented at the board’s Feb. 5 meeting.

The Citizens for Economic Development Act is a proposed bill with verbal commitments from Mississippi House of Representatives and Senate members to be introduced for an eventual vote. If passed, the legislation would allow residents of a municipality the option of voting on a self-imposed temporary local sales tax to fund specific local capital improvement projects.

Under the act, a city referendum with 60 percent of public support would be required before any proposed project could begin.

CEDA is being proposed to state legislature by the Mississippi Municipal League. MML Executive Director Shari Veazey said if approved by the state, municipalities would be provided an alternate funding option for funding capital improvements. All revenue from up to a 1 percent additional tax revenue to Mississippi’s 7 percent base sales tax would remain in the city and would allow for faster completion of projects and savings on interest payments, she said.

“The reason we feel it’s important is because the way it’s currently structured is cities have to go to the legislatures every year to make their case for funding which has becoming increasingly difficult to come by. The cities’ hands are basically tied as to how to raise revenue,” she said. “This is a way for citizens to decide how they want their community to progress through the ballot box.”

Extra funding avenues are necessary to address municipalities’ aging infrastructure and provide services such as fire, police and maintenance with larger operating budgets, she said.

“Cities are in a better position to know what their citizens want (than state government) and this would allow (city leaders) to go to them and ask for that support. Enabling this legislation would allow them to do that if the need arises and if they have support from their cities,” Veazey said. “It helps the cities improve the quality of life for their citizens and makes them attractive for possible industry down the road. Good public facilities and streets make cities more attractive for economic development projects.”

Ward 2 Alderman Sandra Sistrunk, who made the motion to draft the statement of support, said CEDA legislation would allow citizens to work together with city representatives to prioritize capital improvements.

“It shifts the burden from property taxes — which we are always reluctant to tax — to sales tax. It shares it not just with people who live here in the community but visitors who come to the community who use the services. They would be a part of the group that would pay for any services funded by this mechanism because they would be paying sales tax when they are here,” Sistrunk said. “It’s something that will require a local vote and so people would have an opportunity to weigh in on the project and the funding mechanism. It becomes a real collaboration with people and the city government as to how we tackle a project.”

The attractiveness of the CEDA concept is that it would pay faster than bond indebtedness.

“Typically when you’re bonding you have to be able to project what your current revenue streams will allow. With the sales tax it’s not so much what your current revenue streams are but how much can you generate with this additional sales tax,” she said. “We have a lot of visitors; people who come to shop; people who come to football games; people who are here visiting family and friends. We are a place where people come to visit. They use the streets, they use public services and they would have an opportunity to participate in the payment.”

Aldermen passed the measure in a 5-2 vote, with Ward 6 Alderman Roy A. Perkins and Ward 7 Alderman Henry Vaughn in dissent.

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