A bill that will close tax exemptions for industries located at airports is heading to Gov. Phil Bryant after passing both chambers of the Legislature.
Senate Bill 2802, which passed unanimously in the state Senate and on a 113-4 vote in the House of Representatives, amends a law that the Mississippi Supreme Court said last fall allows for exemptions for any businesses located on airport property. The bill gained full support from the Golden Triangle delegation in the House and Senate.
The bill, which is due to Bryant by March 6, according to the state Legislature website, is particularly important for Lowndes County, where several major industries are located on the Golden Triangle Regional Airport’s property.
The exemption has cost the county $160,000 in tax revenue this fiscal year, according to County Tax Assessor Greg Andrews. It’s cost the Lowndes County School District $800,000.
In the case, Rankin County Board of Supervisors v. Lakeland Income Properties, the court ruled unanimously in favor of Lakeland, which operates a strip mall on property owned by the Jackson Municipal Airport Authority. In its ruling, the court found that Mississippi Code Section 61-2-21 — which says contracts, leases, structures and other things constructed on airport property are exempt from paying property taxes — said this applied to any commercial property, permanently.
Senate Bill 2802 changes the law so that only airport-related commercial properties are eligible for tax exemptions. The bill takes effect immediately upon being signed into law.
“The way the Supreme Court read it was much broader than anything to do with airports, aeronautics and airplanes,” said District 39 Rep. Jeff Smith (R-Columbus). “We just simply removed anything other than, if it’s not purely for the airport, airplanes or aeronautics, it’s off there.”
SB 2802 includes tighter language and defines airport-related activities as those that have to deal with the taking off and landing of commercial and private aircraft; maintenance and repair; storage of commercial or private aircraft taking off and landing at the airport; the shipping or transporting of freight by aircraft; the provision of ground and air transportation services to passengers; or the supplying of goods, commodities, things or services to aircraft or passengers within the terminal.
Sen. Chuck Younger (R-Lowndes County), one of the bill’s authors, said he was glad to see the legislation pass.
“We wanted to get the taxation for the county and the schools back,” Younger said. “We thought it was a much-needed thing. All of our county officials were wanting us to get it through and we’re thankful we got it through.
“It wasn’t a Republican or Democrat mixed-up situation,” he added. “Everything was on the same page and everyone was for it. That’s the kind of bill you want to pass, where it’s good for everyone and not just good for one side or the other.”
Airbus Helicopters, Aurora Flight Sciences and Stark Aerospace — all of which manufacture aircraft — were all deemed tax exempt by the court decision. They all will begin paying property taxes again in Fiscal Year 2020, if Bryant signs the legislation.
Attempts to contact representatives with those companies were unsuccessful by press time.
County tax increases, school budget cuts
Lowndes County Board of Supervisors President Harry Sanders said the loss of revenue has been tough, and it played a role in county supervisors raising the county property tax rate by 2 mills for this fiscal year.
Lowndes County School District, on the other hand, did not raise its property tax millage.
“It’s caused the county and the schools tremendous problems this past year,” Sanders said. “It came as a shock to us in that we had counted on that tax money. The Supreme Court even said those industries could go back three years and get a reimbursement. Every single one agreed not to do that.
“It’s a good thing the Legislature got it right,” he added. “There’s no way in the world we should give somebody a perpetual tax exemption, especially since some of those companies didn’t have anything to do with the airport.”
Lowndes County School District Superintendent Lynn Wright said the loss of $800,000 has contributed, in part, to the schools operating at a $2.5 million deficit for this fiscal year. He said other issues, such as Steel Dynamics moving inventory to its new tax-exempt paint shop, have led to the district getting less revenue than expected.
The loss of revenue, coupled with a recent string of construction projects, such as the districts new vocational education center, have put LCSD in a bind, financially.
“We had major construction projects going on in the past 3-1/2 years,” Wright said. “We had $75 million worth of construction we did based on all the projected revenue from industry. We’re having to make some serious decisions on budget cuts going into next year.”
Wright said the district is looking at cutting 50 certified staff positions across the district next year, which would save about $2.5 million in personnel costs. He said the district normally loses 40 to 50 teachers per year due to retirement or teachers transferring out of the district and will not replace those losses this year. LCSD hired 58 teachers last year, Wright said, and hopes to use those new hires to fill the gaps.
Wright said he was thankful to legislators for passing the bill, and said it will help with getting the district’s finances moving in the right direction again.
“We’ve realized that next year is going to be a tough year,” Wright said, “but the years after that, things ought to start looking up again.”
You can help your community
Quality, in-depth journalism is essential to a healthy community. The Dispatch brings you the most complete reporting and insightful commentary in the Golden Triangle, but we need your help to continue our efforts. In the past week, our reporters have posted 37 articles to cdispatch.com. Please consider subscribing to our website for only $2.30 per week to help support local journalism and our community.