The Petal Board of Aldermen is expected to decide as early as its March 3 meeting whether to ask the Mississippi Legislature to set an election allowing residents to vote on the possibility of a sales tax increase that could bring more than $700,000 a year in extra revenue into the Friendly City.
The sales tax – which would be an as-of-yet undetermined additional 1, 2 or 3 cents – would be instituted at Petal restaurants. Each percentage of that increase would bring in approximately $240,000 in annual revenue: 1 percent would bring in that amount, while 2 percent would bring in $480,000 and 3 percent would garner $720,000.
“Obviously, the Legislature is only going to be in session until around the first of May or so,” Mayor Hal Marx said during a recent public forum on the matter. “We understand they’re on a deadline, but local and private bills have a little bit more leeway because of the nature of the kind of bill they are.
“So we probably need to make a decision at our next meeting to actually send a resolution to (House District 104 Representative) Larry Byrd for him to start letting it work its way through the process there, if we’re going do that.”
In order for the resolution to be sent to the Legislature, that idea would first need to be unanimously approved by the board of aldermen. If the Legislature does approve an election, 60 percent of participating voters would need to vote in favor of the measure before it could take effect.
The money generated by the tax would go toward the city’s Parks and Recreation department, which would allow the city to maintain the department at its current level. That, in turn, would free up money in the city’s general fund that could be used for measures such as the police department, fire department or infrastructure.
“That would be a decision the board would have to make on how they want to spend that money,” Marx said. “That money directly from the tax would go to recreation, but it would not be in addition to what recreation gets now – it would mean that the budget for recreation, you could use that money elsewhere.”
A handful of Petal residents took the opportunity during the public forum to give their opinion and ideas on the possibility of the sales tax increase. J.R. Wren said while he loves the restaurants in Petal, if the tax at those locations does increase any more, he’ll have to start eating at home more frequently.
“You say a penny’s not much, and no, it’s not much,” he said. “But every penny that comes out of my pocket and goes into a restaurant or taxes or anything else, that’s money out of my pocket. I think the (city’s) money should be spent better.”
Resident Craig Langnes said he has had discussions with a couple of Hattiesburg restaurant owners regarding the sales tax increase on hotels, motels and restaurants that was implemented last year in the Hub City. Langnes said both of those restaurateurs have heard no complaints from customers regarding the increase.
“So I think it’s good, and I do think taxes need to go up here,” he said. “I know that’s not real popular to say, but to cut the library staff, to cut the staff at the senior center – I don’t think that’s right.
“And I do feel like if we had a catastrophe here, like another tornado, we’d be in deep (trouble). So I think we’re on the right track, and we do need to generate revenue.”
The idea of a sales tax increase in Petal 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 additional personnel. As a city entity, Petal has not increased taxes in more than a decade.
“Last year, we had a budget crunch that hit, and we were able to avoid raising property tax last year, as we have for about 13 or 14 years in the city,” Marx said. “But this coming year, it’s going to be much more difficult to avoid doing that if we don’t have another stream of revenue coming in.
“We used some one-time money this year that we won’t be able to use next year. So we’re going to have a $400,000 or $500,000 hole in the budget unless we get another stream of revenue, or we have some increase in our property value getting appraised by the county or something like that. The alternative would be to cut city services.”
Marx said while he is generally not in favor of tax increases – in particular, ad valorem tax increases – he is agreeable to the idea of an election that would allow people to vote on the matter of this voluntary measure.
“If the people decide that they would rather not have to cut their programs, and they don’t mind paying a little extra when they go out to eat, then I would support that,” he said. “I do not support raising property tax, because people don’t have a vote on that, and the burden falls on the same taxpayers that are always paying the burden already – it doesn’t share the burden with other people.
“Also, property tax, you’ve got to pay that whether you want to or not. A restaurant tax, if you decide you don’t want to go out to eat, you don’t have to pay it. You can decide to go somewhere that doesn’t have a restaurant tax, or you can decide not to go out to eat – you have a little more freedom to choose whether you want to avoid paying that tax.”
