Pascagoula leaders ask legislators for two more tax increases

If passed by legislators, residents would then vote on the resolution.

Pascagoula leaders ask legislators for two more tax increases

PASCAGOULA, MS (WLOX) - Pascagoula city leaders are considering several tax increases to help cover a $14 million deficit that was uncovered by an audit this past summer.

Mayor Dane Maxwell, city manager/attorney Ryan Frederic, and assistant city manager Frank Corder traveled to Jackson this week, meeting with Gov. Phil Bryant to promote the city’s legislative agenda. Included in that agenda is a request from lawmakers to allow two separate tax increases.

The first tax increase would be a reinstatement of a three percent hotel tax, which would be applied to hotels, motels, and bed-and-breakfasts. It was in effect for a few years but has expired. City officials are now asking the state legislature to allow citizens the opportunity to reinstate the special tax through a vote. It would require 60 percent approval by voters in order to pass. Officials said the city has lost upwards of an estimated $175,000 over the past 18 months.

Secondly, the city wants lawmakers to pass another local and private bill that would allow for a one-cent sales tax increase in the city, which would the sales tax to eight percent. That tax would also only be implemented if voters pass a vote with 60 percent approval.

According to a statement from the mayor’s office released Friday morning:

“The Mississippi Municipal League, which represents cities and towns across Mississippi, has had this as part of its legislative agenda for many years, as most believe strongly in home rule, meaning local cities and towns, its elected councils and boards of aldermen, and its citizens through a public referendum should be able to decide what projects and initiatives are worthy of special taxes for limited uses and limited times, items such as new facilities for police and fire or other departments, economic development, recreation and the like. Approval by the Legislature of this local and private option would allow the City Council to offer a project for public consideration and the voters would be allowed to endorse it with their vote for a specified time or vote no.”

All this comes after a recent millage rate increase of 34 percent by the city, raising the taxes on a $100,000 home by more than $200 a year.

Another request the city makes in its resolution is to have municipal elections pushed back. Right now, municipal officials are elected in June and sworn-in in July. Pascagoula city officials say that’s not enough time to adopt a legally balanced budget, which is required by Sept. 15.

They are asking legislators to push back municipal elections throughout the state, designating party primaries in August and the general election in November, with officials being sworn-in the following January.

“This change would allow sufficient time for these newly elected officials to vet and audit the municipality’s finances prior to adopting a budget,” states the resolution.

After facing backlash from residents on social media, Mayor Dane Maxwell released a statement clarifying the legislative resolution. In that statement, he said:

“These items are specifically targeted at allowing the citizens a direct voice in their local government through a public referendum. Statements otherwise implying that the City Council is looking at ways to increase taxes are misleading and show an obvious lack of full understanding of the issues at hand. This is about giving the people the opportunity to vote on items that give this City Council and future City Councils direction on what they value.”

The city has been in a financial crisis since last summer, when city leaders conducted a forensic audit and found the city was more than $14 million in the red. Since then, taxes have been raised and expenses have been slashed in order to bring the budget back in line.

To read the full resolution that Pascagoula hopes legislators will pass, click HERE.

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