Tuesday, December 13, 2016

Clinton Mayor: Increase gas tax & sales tax diversion

Clinton Mayor Phil Fisher sent the following letter to his constituents and legislators:

To all Senators and Representatives,

I hope this letter finds you well. The information contained is divided into four sections and discusses the issue of road/bridge maintenance and funding. Before starting, please understand I am only speaking for Clinton and am not trying to represent the MML or any other City.

Issue/Problem:
Infrastructure is a continually worsening problem at the State, County, and Municipal level. As you well know, maintaining our roads/bridges is expensive and budgets are tight.


I use the roads and bridges throughout the State and want them well maintained for the safety of everyone. I also see the connection of our State’s economic well-being with a well maintained road and bridge infrastructure.


Money:
The Accelerate Mississippi Initiative recommended $375,000,000 per year for a viable statewide maintenance program - paid for with an increase in the fuel tax. I recognize that an increase in the price of fuel is a politically painful step, but a necessary one if we have any hope of maintaining the roads/bridges of Mississippi.

They also recommended that $75,000,000 of that be divided equally between the counties and the cities. For the sake of argument, if the $37,500,000 for the cities were equally divided between the 300 municipalities each would receive $125,000.

In addition, increasing the Sales Tax Diversion from the current 18.5% to the historical 20% level would make a significant impact in all municipalities’ road/bridge maintenance budgets. For example, Clinton would gain $352,000. To put this in perspective, the City of Clinton would need over $25,000,000 in new retail sales to generate $352,000 new budget dollars. As a point of interest, by increasing the Sales Tax Diversion from 18.5% to 20%:

Southaven gains an additional $1,012,301.00
Gulfport gains an additional $1,568,504.00
Madison gains an additional $484,907.00
Vicksburg gains and additional $618,789.00
Tupelo gains an additional $1,447,568.00
Greenville gains an additional $511,900
McComb gains an additional $434,399.

The impact of the 18.5% to 20% increase to the State budget is an additional $31,486,423 to the municipalities (18.5% = $388,332,607 to 20 % = $419,819,030).

Solution:
Municipalities require dependable resourcing to address its road/bridge maintenance issues. I believe the best way to address the maintenance of the 182 miles of roads in Clinton – and by extension the other cities - is to adopt the recommendation of the Accelerate Mississippi Initiative and restore the Sales Diversion Tax from the current 18.5% to 20%.

We cannot wish the issue away because concrete and asphalt deteriorate quickly. As an example, the life of an asphalt street is 10 years. A responsible paving program requires the paving of 10% of the streets each year so that 100% are paved every 10 years. Asphalt cost for a typical neighborhood street is $70,000 per mile. Maintenance is not cheap, but it cost less than rebuilding.

With the $125,000 from the Accelerate Mississippi Initiative, Clinton would pave an additional 1.85 miles p/y. The 1.5% increase in the Sales Diversion Tax gives Clinton an additional $352,000 per year, paving an additional 5.02 miles. This equates to 6.87 miles (1/3) of the 18 miles - per year - Clinton needs to pave.

Of course these two sources should not be the only money budgeted for road/bridge maintenance. Each city should provide maintenance money from its own budget. Currently, Clinton budgets $300,000 p/y (vs. zero budgeted in FY 12) and that will grow in coming years.

If the Legislature increases the Sales Diversion Tax to 20% and adopts the Accelerate Mississippi Initiative Recommendation, I will put the entire amount in Clinton’s road/bridge maintenance fund. Adding the $477,000 increase ($352,000 +$125,000) to the money we already budget ($300,000) will take Clinton over half way the $1,200,000 p/y required to manage a responsible maintenance program for our City.

Advantages:
1. The Legislature could require all monies received from the increase go to roads and bridges. This would provide a contribution from the Legislature to a City’s maintenance needs and allow the Legislature to focus on the road/bridge maintenance of the State’s highway system.

2. All three levels of government - State, County, and Municipal - benefit from the increase. Most important, the constituency would see immediate results from this action with better roads and safer bridges.

3. The increase adds significant money to any municipal maintenance budget, allowing cities to accelerate street and bridge maintenance ($477,000 p/y to Clinton).

You must address this growing issue in this session.

37 comments:

Anonymous said...

Good letter, soundly based. Most important is the very last sentence, suggesting that this must be dealt with this session.

We live in a state where *nothing* ever seems important enough to be addressed *this session* but can be kicked down the road a year, two, five. This is the historical mindset of the Mississippi Legislature, regardless of party.

Pappy O'daniel said...

Historically, every level of government is completely irresponsible and negligent in the maintenance of public facilities and roads. The Mayor is on the right track, however, this problem is beyond a breaking point across the state. There needs to be a 1 year moratorium on new infrastructure and dump everything into maintenance...of course, that won't happen because urrbody get paid on new projects, that's what state legislators and their yo-yo buddies love.

Anonymous said...

Dear Mayor, the Legislators do not care about the State of Mississippi or wonderful small towns such as Clinton. Thanks for trying!

Anonymous said...

Dear Mayor, the Legislators do not care about the State of Mississippi or wonderful small towns such as Clinton. Thanks for trying!

Anonymous said...


Translation: "If you'll just raise taxes a little bit, all of our problems will go away.

Derrell Ray said...

If you gave these clowns a gazillion dollars think they could fix the roads,,no

Anonymous said...

It's a great thing this suggestion comes from a white Clinton mayor and not a black Jackson mayor. That would be the kiss of death in the Mississippi legislature. In fact, Jackson should announce it's opposition. That's called strategy.

Anonymous said...

"We're from the government and we're here to help you".

Anonymous said...

This seems to be a short fix because automobiles are using less gas each year as they are becoming more efficient. Moreover, the sale of electric cars seem to be on the rise, and will likely start to rival gas powered vehicles in the market in the next few years. Wouldn't it be better to raise the general sales tax to accomplish road and bridge repairs for the long term?

Anonymous said...

Wonder why years ago a city could build streets, put in water systems, and build waste systems with the tax money they had coming in? Now taxes have been increased many times and the same cities cannot even repair the roads, waster and waste systems that are already built. Something is very wrong.

Anonymous said...

Gee, wonder why he left Jackson off the list of cities that would gain additional money from the tax increase?

Anonymous said...

I think they should raise salaries and per diem for those in the legislature. By doing this I think they will be
willing to work harder and solve some of these complicated problems. Another cost savings idea might be to look at reducing teachers salaries. There are a lot of teachers in this state and a minor salary cut would produce a lot of extra money.

Anonymous said...

I'm so tired of hearing this "crumbling infrastructure" trope. It's one that everyone has bought into because everyone knows a bad stretch of road nearby. Unless and until MDOT provides a detailed honest accounting of how they are efficiently maximizing their current appropriation to manage the upkeep of these roads (they aren't), there should be ZERO tax increases. This is a money grab, pure and simple.

Anonymous said...

Moreover, the sale of electric cars seem to be on the rise, and will likely start to rival gas powered vehicles in the market in the next few years.

You must be smoking some of that taxpayer subsidized weed with Musk.

Anonymous said...

Three things need to be addressed.

1) there are a lot of people not paying their fair share of taxes in this state. Think earned income tax credit. More takers than payers.

2) our gasoline tax has not been altered in years. I don't think it will totally fix the crumbling infrastructure but it is low and has not kept up with the rise in inflation.

3) why do we as a state that needs more road work than ever typically sub everything out to WG Yates & Sons and their sister company Superior Asphalt; APAC, and/or Dickerson & Bowen. Most all jobs, no matter the Prime Contractor, use one of these 3 to do the actual work with each "layer" making a hefty sum from overhead and profit. Why cant the state of MS have its own asphalt plant with its own equipment and employees. Lord knows we need the jobs and have the work. Its a hefty investment up front, but long term, I would think it would be beneficial. Plus a majority of allotted the road paving money in MS comes from federal grants that we receive through people like Thad Cochran.

Workin' In A Coal Mine said...

Moreover, I've never seen an electric car. Where are they starting to rival gasoline powered cars?

Anonymous said...

2) our gasoline tax has not been altered in years. I don't think it will totally fix the crumbling infrastructure but it is low and has not kept up with the rise in inflation

There should never be any reason to raise taxes because of inflation. People buy much more gas today than they did when gasoline was first taxed. The gallons of gas sold with it's tax on each gallon should be enough of an increase.
If the tax on gasoline back then was enough to get the job done why isn't the tax on much more gas sold today enough? Just imagine how many more gallons of gas are sold today compared to what was sold when gas was first taxed.

Anonymous said...

Um, 3:00, you are not entitled to your own facts. Gasoline consumption is significantly lower over the last 10 years.

http://www.autonews.com/article/20150325/OEM06/150329911/average-u.s.-gasoline-usage-lowest-in-3-decades-study-says

Anonymous said...

Gasoline consumption has dropped steadily over the last 10 years. If you can post on JJ, you can use Google presumably. Cost of maintenance, up. Gallons of gas sold, down. Two facts that are relevant to this discussion.

Anonymous said...

Watch the legislature pass another tax cut this year, not fund road maintenance and ignore PERS issues.

Conservatism for Dummies. AKA conservatism by people that don't know math, voted for Trump and couldn't hold Reagan's jock strap.

Safe Space For Dummies.. said...

I'm just glad people like 4:08 have found their safe-place here on JJ and aren't walking around Fondren in a suicidal fog.

Anonymous said...

I would be all in for raising the gas tax which hasn't been done in two decades or more. The Mayor's letter states an 18.5% to 20% diversion tax. Am I correct to believe that this means $18.5 cents to $20.0 cents per gallon of fuel sold? The % is a little confusing

Anonymous said...

Why not collect tax on goods sold on
The internet that created thousands
More truck trips a year.

Anonymous said...

The solution in the State of Oregon is to tax vehicle users by the miles they drive. I'd much rather pay a "usage tax" at the pump and drive a fuel efficient vehicle. Check it out:

http://www.myorego.org/

Anonymous said...

FIRST: The Diversion: The State of Mississippi collects sales tax on goods. Currently they "divert" 18.5% of sales tax back to the political entity (city, town, etc.) where the tax was collected. Mayor Fisher is proposing that instead of 18 1/2 cents of every dollar collected the 20 cents of every dollar collected be given back to the origination municipality. This would result in a much better situation for municipalities than would increasing the gasoline tax.

SECOND: The proposal last year that was before the State Legislature on gasoline tax was only going to give back $75 million to the cities and towns of Mississippi. This would be so divided and minced that no one would receive enough to do much of anything with their streets and bridges.

THIRD: No municipality can afford to build streets comparable to interstates. Yet, we now have 18-wheelers making most deliveries to every type of establishment within every city's limits. Our roads cannot take this abuse on a daily basis. Open to suggestions.

FOURTH: A method of general accountability to the public by MDOT must be established. They operate like a secret society, IMHO. Their methods of selecting outside assistance is not well understood and we do not operate like our sister states. Again, open to suggestions.

Anonymous said...

Gas tax makes sense because it is essentially a user fee. The more you use the roads, the more you pay for maintenance and upkeep. Should get away from using any general fund monies for road maintenance.

1:01 the demands on government keep growing. people want top notch police and fire protection and roads. Also, people want quality of life which includes recreation facilities. Not just any recreations facilities like we had when I was growing up, but manicured soccer and baseball fields, artificial turf football fields, professional quality lighting etc. These cost a lot of money to build and maintain. People want the services but scream about taxes. Zoos, museums, festivals, fireworks and etc cost a lot of money, but people want them.

Anonymous said...

The legislature will never share more money. He who has the gold rules. They are drunk with power. Our local roads and streets are in far worse shape than our state highways. Need does not matter to the legislature. they gave all the big business tax breaks and the local citizens suffer. No doubt they plan to steal retirement benefits from employees after they have been earned. Look at the state job site. Salaries are terrible, yet we have people willing to take lower salaries to receive the retirement benefits.

Anonymous said...

The tax on gas was supposed to be a temporary tax when it first started. $.01 per gallon. I think that was in the late 1920s. Now we have a 18.4 cent state tax and a 18.4 federal tax on each gallon.
The people posting about the gas consumption going down in the last 10 years failed to read the rest of the story. Gas consumption has gone up. Gas consumption for each person has gone down. In 2015 we used 140.43 billions gallons of gas. Do the math yourself.

Anonymous said...

Dear Mayor Fisher
You have been approached several times about shopping your health insurance for the city Employees, yet you choose to keep paying what your current TPA gives you each year.

Anonymous said...

@ December 13, 2016 at 1:01 PM

"Wonder why years ago a city could build streets, put in water systems, and build waste systems with the tax money they had coming in? Now taxes have been increased many times and the same cities cannot even repair the roads, waster and waste systems that are already built. Something is very wrong."


That's a plausible argument if the population has shrunk. But Clinton's population has doubled within the last 20 years - so that means more wear and tear on their infrastructure.

Even Mississippi's population has grown. That's more wear and tear on the state's infrastructure. Mississippi had a population of 222,000 when it became a state in 1817, now its at 2.8 million people, the only thing with Mississippi its gaining senior citizens and retirees, not maintaining its younger base. But, there are still 1.9 million registered drivers in our state. That's a lot of daily wear and tear in a 12 month period.

But even then you still have to consider the wear and tear to our infrastructure due to the growth in the deep south from Memphis, Nashville, Birmingham, Atlanta - we have seen massive increases in people passing through this state.

So no, they cannot repair the roads because they are not focusing enough resources to maintain the upkeep. It's just like a house - the longer you ignore small issues - the bigger and more expensive those small issues become when you do not do the basic maintenance or the upkeep.

Anonymous said...

@ 8:59am

well said - totally agree

Anonymous said...

9:57, more people in the state means more people paying taxes, Just think how much more taxes 2.8 million people pay than 222,000. You sound like a politician. You want people to believe the tax money has not grown along with the population. Ever wonder how much more gas 2.8 million people use than 222,000 and how many more cars are using gas?

Anonymous said...

@11:40am

You want to pretend like 2.8 million people will have the same effect on the infrastructure as if it were only 1 million people!?

The wear and tear is increased 10 fold.

Then you have to consider how long these maintenance projects have been neglected!?

I'm sorry, but you can't tell me our infrastructure is worth a damn after 30 years of neglect

Anonymous said...

1:16, I will type real slow so you can keep up, even a politician should be able to understand.
Population before 222,000. Population today 2.8 million. That is over ten fold number of people paying taxes and buying gas. That means there is more than a ten fold amount of tax money taken in.
You say there has been 30 years of neglect. Now can you tell me how much tax money was paid in for those 30 years and what happened to it?

Only a politician or a JPS graduate would not be able to see the problem.

Anonymous said...

@1:57pm

"Now can you tell me how much tax money was paid in for those 30 years and what happened to it?"

You are pretending as if 100% of general funds went towards road maintenance as well. Think about what that money goes towards besides road repairs? Library's, schools, firemen, equipment for said firemen, policemen, equipment for said policemen, tax incentives for businesses, lawn maintenance, the list is endless. But if 100% of general funds was going towards road maintenance you would have a point.

"Only a JPS graduate would not be able to see the problem"

Just where the hell did you go to school Einstein?

Tracking The Geniuses said...

"Just where the hell did you go to school Einstein?"

Einstein dropped out of school at age 15. So there's your clue.

Anonymous said...

3:37, so the politicians decided to spend the money supposed to go to keep up the roads, water and waste systems on something else. Now they want to increase taxes so the people can try to make up for their incompetence. They decided to do that for 30 years. Who the hell elects these idiots and why the hell does people still make excuses for them.
Still sounding like a politician.

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