December 13, 2013 9:57:48 AM
In 1994 Starkville put before the voters the proposition that there be an additional 2-percent tax attached to the food and beverage sales for those enjoying the restaurants within the city limits. This measure succeeded and since then the city and several other government related entities have been on the receiving end of a lot of additional funding.
The original measure divvied up the new funding source between the City of Starkville, the Starkville Park Commission, the Oktibbeha County Economic Development Association (OCEDA) and the Visitor and Convention Council (VCC).
Getting the 2 percent enacted took what is known as a local and private bill through the Legislature. It is called local and private because it is just that: It doesn't affect any governmental entity other than the one seeking its passage. It was originally passed and signed into law and approved by the Starkville voters in 1994. It took effect in 1995. From 1995 until 2005 the distribution was set at the VCC receiving 20 percent; Park Commission getting 40 percent; OCEDA getting 20 percent and the city of Starkville getting 20 percent. The first year of collection provided about $558,000 divided among the recipients.
Since then each year it has grown and by the end of the first 10 years the annual total was $1,027,000. It had almost doubled in 10 years. At the end of every 10 years the bill has to be renewed. In 2004 the Board of Aldermen submitted a revised local and private bill that redistributed the funds and added Mississippi State University as a recipient. The new division reduced the VCC to 15 percent, OCEDA went to 15 percent, Park Commission stayed at 40 percent, the city went to 10 percent and MSU got a "whopping" 20 percent. You can probably tell by the whopping adjective I think this is a bit excessive. I believe MSU should get something, but in my opinion 10 percent would be a fairer number. Anyway, over the next 10 years the food and beverage tax grew so that for this current year it is expected to be approximately $1,600,000. That growth has been steadily increasing every year with no sign of stopping. Even in the recent economic down times there has been continued growth.
The beauty of the 2-percent tax is that a good percentage of those funds come from our visitors. Sure you and I may pay an additional $1 for every $50 we spend at Old Venice or the Grill or Bin 612, but so do the ESPN commentators and the Alabama fans or the LSU fans when they come to town. Part of what we get from holding special events is that the visitors to our special downtown events or the horse park events help us pave roads and pay the park improvement bonds off and promote economic development through VCC and OCEDA. How good is that?
And so it is time to renew the 2-percent tax bill once again. I can't imagine anyone in the four corners of Starkville who would seriously consider renewing the 2-percent tax not to be a great thing. If we lost this funding source, the downside is increased taxes to every citizen based on the loss of (at last year's rate) $792,427 annually. That is just the money going to the city and the Park Commission. OCEDA and VCC would lose approximately $238,000 each and MSU would lose $317,000. There is no context in which that funding for any of the recipients would be considered easily replaced. It would certainly be devastating to the city since that would be the equivalent of about 4 mills in taxes that would have to be added just to replace the current funding level.
The renewal of the 2-percent tax has to be taken up by the Legislature at the next session which begins next month on Jan. 7. Call or write or email your aldermen and encourage him or her to move forward with this resolution requesting the renewal of the 2-percent legislation so we don't find ourselves trying to make up dollars from our pockets when we can share the cost with the visitors who also have benefited from spending time in Starkville. The 2-percent legislation is like grant funding. Yes, it is our money, but it is also someone else's money helping us do what we need to do to make Starkville better. This is too important to wait until the last minute to get it done.
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