July 19, 2018 10:51:04 AM
Since March, when the Lowndes County 2-percent restaurant tax was reduced to ashes, local people -- even Jeff Smith, the man most responsible for killing the tax -- pinned their hopes of saving the tax that supports tourism on a special session of the legislature.
The idea that the tax could be renewed in a special session called by Gov. Phil Bryant became the rallying cry almost as soon as the manure hit the ventilation system in March.
The theory is that a compromise bill on the restaurant tax could be considered during the special session.
Last week, Bryant finally broke his silence on the subject, saying he would likely call a special session of the legislature in August, primarily to figure out a way to address the state's road/bridges crisis.
But, alas, the special session may come too late to save the restaurant tax, even though Smith still intends to ask the governor to add the tax bill to the special session agenda.
In order to have extended the tax, the special session needed to come before June 30, the date the restaurant tax expired. If -- and it's a big if -- the legislature considers a restaurant tax in the special session, it would be considered a new tax, requiring voters to approve the tax by a 60-percent margin. That vote could not take place until September at the earliest, but the tax could be implemented immediately after voters approve it.
Aside from the restaurant tax, the special session will be keenly watched here in Columbus and in cities throughout the state.
Ostensibly, the road/bridges revenue would come from a variety of sources, including a state lottery and revenue from sports gambling, the latter expected to generate $3 million in tax revenue, according to Revenue Commissioner Herb Frierson.
What really piques local governments' interest is the suggestion that road/bridge funding could also come from online sales tax revenue after the US Supreme Court ruled earlier this summer that states can recover sales tax on online sales even if the retailers have no physical presence in the state.
Collecting online sales tax is estimated to bring in an additional $75 million per year according to Frierson. The thinking in Jackson is that every dime will go to the state's road/bridge infrastructure.
Not so fast, the cities -- including Columbus -- are saying.
Their argument is that the online sales tax should be dispersed like any other sales tax -- with 18.5 percent of that revenue returned to the communities where the purchase originated.
The idea that online sales tax should be distributed differently -- i.e., not distributed at all in this case, is like saying sales tax on apples goes one place while sales tax on oranges goes somewhere else.
Sales tax is sales tax, the cities say.
The cities should not bear the burden of all those big tax cuts the legislature has been passing for the past six years. The legislature made its bed. Let it sleep in it.
While there's little dispute that the state has to address the road/bridge crisis, it is a delusion to think that road/bridges are the only pressing need.
The state has neglected to properly fund education for years. When education, like roads/bridges are neglected, the problem is only magnified. It has slashed the budgets of state agencies across the board. Revenues will continue to fall short of what is needed. All thanks to the orgy of tax-cuts, mostly to big corporations since 2012.
In reality, the state could put the entire amount of revenue from online sales tax into its general fund and still not meet its needs.
The state's finances are not a single-car collision. It's a 30-car pile-up. There's carnage just about everywhere you look.
No doubt, whatever the legislature decides to do, the lawmakers will hail it as solution.
More likely, it will be a stop-gap measure whose primary goal will be to take the heat off the legislature.
In other words, it will be business as usual in Jackson.
There's nothing special about that.
Slim Smith is a columnist and feature writer for The Dispatch. His email address is [email protected]