The Petal Board of Aldermen is expected to vote Tuesday whether to send to the Mississippi Legislature a request to set a referendum for the possible institution of an additional 3 percent sales tax at restaurants throughout the Friendly City.
If the Legislature approves the measure, a vote will be set in the near future for city residents to decide whether to initiate the tax, which would go toward the city's parks and recreation department. A 2 percent sales tax increase at the restaurants was previously sent to the Legislature in early March after being unanimously approved by aldermen, but that measure did not make it out of the last legislative session because of restrictions imposed by the COVID-19 pandemic. Had that measure been pushed through, it was expected to bring approximately $480,000 in annual growth revenue for the city.
If a public election on the matter were to be approved by the Legislature, 60 percent of the voters who turn out would have to vote in favor of the increase before it could be implemented.
Officials expect money generated by the tax to allow the city to maintain the parks and recreation 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.
The idea of a sales tax increase of 1, 2 or 3 percent 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 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,” Mayor Hal Marx said in a previous story. “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.”
Aldermen will take a vote during their regularly scheduled meeting at 6 p.m.
A similar 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 17 Parks and Recreation Department projects throughout the city, including a splash pad in Palmers Crossing, an extension at the walking trail at Duncan Lake and the transformation of the former Hattiesburg American building into a community arts center.
