Petal officials have received an impressive first monthly check from the recently-implemented 3 percent tax increase at restaurants in the Friendly City: $78,112.
Those funds, which are distributed by the Mississippi Department of Revenue and reflect sales tax collected in October, will firstly be used for the second half of a pay raise for the Petal Police Department.
“It’s a good number for us,” Mayor Tony Ducker said. “We budgeted for a lower number, so this is solid and continues to show, as our retail and restaurant sector grows, people will support Petal businesses.
“While I am happy to see this number, it’s important to remember a lot of these dollars already have a name on it. For instance, you will see some pay raises on the next agenda for our police department as well in the spring.”
The 3 percent tax increase was approved in early August, when 74 percent of voters voted in favor of the measure during a special election. Unofficial records from Petal City Hall showed that 457 residents voted in the election; of that, 344 voted for the measure and 113 voted against it. The tax required a 60 percent voter approval to pass.Under the new tax increase – which is expected to bring $750,000 in extra revenue to the city each year – an individual paying a $10 tab at a Petal restaurant will pay an extra 30 cents on that bill. The funds raised from the tax will go toward the city’s Parks and Recreation Department, which will allow the city to maintain that department at its current level.
That, in turn, will free up money in the city’s fund that could be used for measure such as the police department, fire department or infrastructure. The tax began to be collected in October.
“We can’t pay somebody with money that we don’t have,” Ducker said. “We can’t pave roads, clean ditches – I can’t do anything with money I don’t have.
“We’re going to be very conservative, and be very smart with your tax dollars, and stretch them as far as we can, so I think that’s very important. By the City of Petal, and the folks coming out and supporting that, they’re going to see the first peg – or first fruits, I guess – of that being passed.”
As the sales tax figures begin to come in, officials will evaluate those numbers and allow pay raises for other first responders in the city, such as the fire department.
“So it’s important to do things,” Ducker said. “It’s important to continue to support our restaurants – it’s important to support all of our Petal businesses.
“There are entities – national chains – that are looking at our numbers to see what they look like, if they want to come and move here. We’re going to have some great announcements – there’s things we can’t mention right now that we’ll be able to announce, hopefully, in the first part of the year. We’ve already got some paperwork in on some of them that you’ve already heard about, and that’ll be taking place in the spring.”
The restaurant tax will not affect property, or ad valorem taxes; as a city entity, Petal has not raised those taxes in more than a decade. The city’s millage rate - which is a unit of monetary value equal to one-tenth of a cent that determines the amount of property taxes residents pay - will remain at 46.21 mills.
The idea of a sales tax increase at Petal restaurants has been passed around for the last several months as an option to increase much-needed revenue for other city programs and departments without having to raise property taxes or cut personnel. The proposal for the special election passed both houses of the Mississippi Legislature in March, and the Petal Board of Aldermen voted unanimously on June 28 to set the date for the referendum.
A similar sales tax measure was passed in Hattiesburg in early 2019, when voters overwhelmingly approved an additional 1 percent sales tax at Hub City restaurants, hotels and motels. The funds from that measure are currently going toward several Parks and Recreation Department projects around the city, including a splash pad in Palmers Crossing, an extension of the walking trail at Duncan Lake and the addition of batting cages at Vernon Dahmer Park.
“People still go to Hattiesburg, and Hattiesburg has had this tax now for years,” former Mayor Hal Marx said in a previous story. “They’ve had a 2 percent tax for about the last 20 years, and then they added another percent just a year or two ago.
“I haven’t noticed any decrease in the number of people going out to eat in Hattiesburg. So I think people are willing to do it; I don’t think people are bothered as much by it as some opponents of it make it seem.”
