Article Comment 

Restaurant taxes a boon for area cities

 

Jerry Flowers

Jerry Flowers

 

Lynn Spruill

Lynn Spruill

 

 

Slim Smith

 

 

The 2-percent restaurant tax collected in Lowndes County may change next year, following the Columbus City Council's passing of an entirely new tax which would collect revenue only from city restaurants. 

 

City attorney Jeff Turnage drew up a new bill for the tax, and the council passed a resolution supporting it at Tuesday's council meeting. Turnage said the tax is based on a 2-percent tax collected in the city of Winona. 

 

As taxes go, Winona's food-and-beverage tax has produced a small amount of revenue compared to similar taxes in some of the state's larger cities. 

 

But since the city of about 5,500 residents began receiving monthly revenue from the tax in October 2016, Winona Mayor Jerry Flowers says the tax has produced some big results. 

 

"So far, we've gotten $180,000 since it started and when November and December money comes in, it will be about $200,000," Flowers said. "We've used the money for a lot of different things, but the biggest thing we did was make some improvements to our baseball fields." 

 

Flowers said the resolution approved by the state legislature in 2016 stipulates the money be used for tourism. 

 

"For us, the baseball field is probably the biggest tourist attraction we have," he said. "We have travel team baseball tournaments and we think the improvements we have made will help us attract more tournaments, which means more people staying here and eating here," he said. 

 

Some of the tax receipts have also been used to "spruce up" the city, which Flowers said also enhances tourism. 

 

"We've ordered new Christmas decorations, put in new stop signs, things like that to make our city look better," Flowers said. 

 

Flowers said the revenue is deposited in a special account and managed by the city's board of aldermen. 

 

"We looked into forming a committee to manage that money," Flowers said. "But we decided that it would be better for the board of aldermen to make those decisions." 

 

In Starkville, the county wide 2-percent tax is managed much differently. 

 

Its resolution disperses the funds proportionately, with the revenue going directly to those entities. 

 

"Forty percent goes parks and recreation and can be used only for capital improvements," Starkville Mayor Lynn Spruill said. "Twenty percent goes to the student government association at Mississippi State, 15 percent goes to the Oktibbeha County Economic Development Authority, 15 percent goes to the Visitors & Convention Bureau and the city gets 10 percent that goes to our general fund." 

 

Starkville has had its restaurant tax since 1995. It has been renewed four times since then. 

 

The revenues have grown steadily each year. In 2016, the tax produced $1,947,318 in revenue. This year, with two months of revenue yet to be received, the tax has brought in $1,702,769. 

 

Spruill said distributing the receipts of the tax directly to the entities on a proportional basis has allowed all of the groups to make good decisions about how the money is spent. 

 

"Our goal was always for all of those entities to grow and that's exactly what has happened," Spruill said. 

 

The Columbus City Council passed its own resolution for a food-and-beverage tax after the county and city could not agree on terms for an extension of the current 2-percent restaurant tax, which will expire in July. 

 

Unlike Winona's tax, the city's resolution does not include proportional break-downs on how the money will be spent. The city's resolution earmarks funds for recreation, tourism, special events and projects, parks and economic development within the city and for related purposes. 

 

The tax applies only to those businesses located within the city limits and will also go to a separate fund. 

 

The tax is expected to bring in more than $2 million in revenue. 

 

Both Flowers and Spruill say the tax has been a godsend for their communities. 

 

"It's been huge for us," Flowers said. "We just wouldn't be able to do the things we've done without it. There's just no way." 

 

Spruill said the same about the tax in Starkville. 

 

"It would be horrendous if that tax went away," she said. "If we were to try to do what we've done with the money without the tax, you're looking at 4-to-5 mills. I don't think anybody seriously questions how good the tax has been for us."

 

Slim Smith is a columnist and feature writer for The Dispatch. His email address is [email protected]

 

 

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