Monday, May 10, 2021

The REST of the Story: Jackson Finances

 Jackson's coffers are almost empty thanks to white flight taking its money to the suburbs.  Such is the excuse national and local media make in explaining way Jackson's water problems.  However, such a blame game ignores reality.  Jackson gets more money than ever but managed to mismanage its water/sewer department into virtual bankruptcy. 

If Jackson would just collect the money owed for water/sewer services, it would have enough money to maintain the water system.   The accounts receivables lines on the city's annual audits spell out the problem in black and white.

 


 Accounts receivables are money owed but not collected.  Jackson's receivables stayed below $10 million for several years then crept up to the $20 million range where it stayed until 2013.  Unfortunately, all hell broke loose on the balance sheet in 2014 as accounts receivables doubled in only five years.  Cutting off water cut-offs might have been great politics but it was a disaster on the books as the water system went broke. The cash on hand account shows the carnage.  


Water/sewer rate increases usually generated large hikes in cash as shown on the chart.  However, as accounts receivables skyrocketed, the water/sewer system's cash on hand plummeted to zero.  Jackson literally spent every dime it had to prop up the water sewer system because it didn't collect payments.  

Jackson can't even claim declining water sewer revenues are at fault because although the number of connections have decreased, water sales increased from $42 million in 2003 to  $50 million in 2019.  

 

The city should be getting more money than ever from its water/sewer services as shown by this chart.  However, the failure to collect payments while spending every dime available presents a picture that is quite ugly. 

 


The 2019 item is correct.  The Jackson water/sewer system generated an operating loss of $17 million in 2019.  The system was a money-maker for the city of Jackson right up until 2014 when the wheels fell off the system.  


The depreciation expense was equivalent to the operating loss.  The cash flow presented a somewhat better picture. 

Jackson's overall budget does not show a city hemorrhaging cash.   Jackson gets more revenue than ever before.  The property taxes alone are nearly $20 million more than in 2002.  

 


The sales tax revenue remained fairly flat since 2002.  Jackson's sales tax revenue was $36 million in 2002.  It bell between $32 million and $37 million although it was $40 million in 2006 and $45 million in 2007 but those two years were outliers.  The city enjoyed a slight bump in sales taxes in 2017 thanks to the new internet sales tax diversions.  The 2019 revenue was $54 million if one counts sales tax ($14 million) and other ($40 million).  

What does it all mean? It means Jackson's total revenue from government activities is an unprecedented $242 million in 2019.   

 


Kingfish note: Compare the charts to some statements made by the media about Jackson's water crisis. 

Vice News

 "Jackson’s water system has been on the decline for decades.  The city relies on two aging WT facilities, one of which is over 100 years old and has limited funds for replacement.  Jackson is scraping by on a $300 million budget. "

The tax coffers in Mississippi’s blackest city  have dwindled along with its white population over the past 30 years. 

Donna Ladd (NBC Column)

 Make no mistake, the fact that low-income Jacksonians are living amid the stench of toilets that won’t flush is a direct legacy of white-supremacist thinking at the state level, not the failure of a few bill collectors in the city to collect on enough delinquent customers.

Politico

But Jackson’s tax base has been declining for years.

 Anna Wolfe (Mississippi Today)

Two generations of white and wealth flight out of Jackson has reduced the built-in revenue that officials say the water system needs just to maintain full operations, including hiring personnel — let alone to make a dent in an estimated $1 billion worth of needed upgrades.

New York Times

 In Jackson, boil-water notices are common and an enduring municipal drama has played out for decades, as white flight, an eroding tax base and poor management have left the remaining residents with old and broken pipes, but without the public funding to fix them.

The city has had a dwindling tax base for decades, after the integration of schools and other public spaces in Jackson triggered a dramatic flight of white residents. In many cases, they took their wealth and tax dollars with them.

 

Notice a disconnect?

 

 Raw Data 

Accounts Receivable

2003: $6 million

2004: $8 million

2005: $6 million

2006:  $7 million

2007: $7 million

2008: $13 million

2009: $15 million

2010: $18 million

2011: $20 million

2012: $24 million

2013: $25 million

2014: $40 million

2015: $41 million

2016: $50 million

2017: $44 million

2018:  $56 million

2019: $49 million

 Water/Sewer Cash on Hand

2003: $25 million

2004: $5 million

2005: $8 million

2006: $11 million

2007: $27 million

2008: $9 million

2009: $18 million

2010: $12 million

2011: $9 million

2012: $13 million

2013: $4 million

2014: $13 million

2015:  $7 million

2016: $5 million

2017: $0.2 million ($182,000)
2018: 0

2019: 0

Water Sales

2003: $42 million

2004: $40 million

2005: $39 million

2006: $45 million

2007: $43 million

2008: $47 million

2009: $41 million

2010: $42 million

2011: $47 million

2012: $47 million

2013: $44 million

2014: $69 million

2015: $59 million

2016: $63 million

2017: $61 million

2018: $57 million

2019: $50 million

 

Operating Income (Loss)

2003: $7 million

2004: $9 million

2005: $10 million

2006: $13 million

2007: $13 million

2008: $9 million

2009: $5 million

2010: $8 million

2011: $11 million

2012: $6 million

2013: ($0.9 million) 

2014: $22 million

2015: $19 million

2016: $37 million

2017: $6 million

2018: ($80,000)

2019: ($17 million)

 

Jackson Total Revenue

2002: $213 million

2003: $178 million

2004:  Use midpoint between 03 and 05

2005: $202 million

2006: $217 million

2007: $213 million

2008: $219 million

2009: $205 million

2010: $199 million

2011: $203 million

2012: $210 million

2013: $215 million

2014: $235 million

2015: $222 million

2016: $225 million

2017: $238 million

2018: $241 million

2019: $242 million

 

Property Tax Revenue

2002: $59 million

2003: $64 million

2004: $60 million

2005: $59 million

2006: $62 million

2007: $65 million

2008: $66 million

2009: $71 million

2010: $68 million

2011: $68 million

2012: $75 million

2013: $72 million

2014: $78 million

2015: $77 million

2016: $69 million

2017: $76 million

2018: $78 million

2019: $78 million

 

Sales Tax Revenue

2002: $36 million

2003: $35 million

2004: $36 million

2005: $36 million

2006: $40 million

2007: $45 million

2008: $37 million

2009: $33 million

2010: $32 million

2011: $32 million

2012: $33 million

2013: $32 million

2014: $33 million

2015: $32 million

2016: $36 million

2017: $14 million* Add 39 million

2018: $14 million* Add $40 million

2019: $14 million* Add $40 million

 

30 comments:

Anonymous said...

KF knocked it out of the park - suck it Donna!

Anonymous said...

The white's didn't move a single house out of Jackson when they left.

Other than some abandonment and non-maintenance, most all of the houses that were in Jackson in the 70's are still there, except they have new owners.

So, this is a management issue. Not a racial issue.

Anonymous said...

KF strikes again. Doing what any "real" journalist won't and doing what our un-elected auditor can't!

Anonymous said...

It looks to me like the looting of Jackson began in earnest under Harvey Johnson, exploded under Chokwe I, and went off the rails under Chokwe II. Problem was, they we no longer looting the white power structure, as envisioned in the beginning, but their own people.

Anonymous said...

Kingfish bringing actual facts and data. No wonder a real media site would never hire him. He actually does the work, gathers the info, and presents it to the public. It's a novel concept that is unacceptable in today's media.

Anonymous said...

Every weekend every parking lot in Madison is full of Hinds county cars. The citizens of Jackson are afraid to shop there anymore and are leaving millions in sales tax dollars in the surrounding counties. That has nothing to do AT ALL with white folks.

Anonymous said...

2:09pm, Shad was appointed in 2018, and then he ran for the Auditor position in 2019 and was elected by the voters of Mississippi.

Anonymous said...

I love these charts because they show what I have been saying: Total revenue, property tax receipts, and sales tax receipts have been steadily increasing under Mayor Lumumba. Those of us who live in Jackson see it everywhere: new construction, new businesses opening, streets being repaired. Property values in my neighborhood are up, not down.

There’s no question that there are problems with the water system. They will be fixed gradually over a long period of time. Forget the blame game, the focus needs to be on solving the problem, which I have faith will be accomplished.

Kingfish said...

No. There r some things you can simply no longer buy in Jackson.


Anonymous said...

Gotta blame somebody. Why not whitey?
Seriously though, the Water/Sewer billing fiasco has been a major issue for many years now. This is a classic case of moral hazard. When people (more and more each year) hear that their neighbors/friends aren't paying, others begin to think "why am I am the only sucker paying for water"...."no one else does, so why should I". Until the city pulls it's head out of it's liberal A&$ and get tough on delinquencies, this will get worse.

Thanks King for doing the heavy lifting for the city. If they would actually read some of your reporting, they might begin to help themselves.

Anonymous said...

Can Jackson just call their bond pimps and get some more money that way?

Anonymous said...

They, nor you, nor anyone else has any idea how much they haven't collected. Accounts receivables are bills sent out but not paid. Throngs of people never have and still don't get a bill. Throngs of people have illegal direct connections. The story of lost revenue is much, much worse than growing receivables -- MUCH worse.

Anonymous said...

2:45, it must be wonderful to live in an ignorant state of bliss.......

All the sales of Popeyes, KFC, Church's along with the tires needed for the illegal street racing won't save Jackson.

Problems with the water, why that's just tip of the iceberg that's sinking the city. These glorious upswings you're slobbering over will take a hundred years or more to make a difference. I guess that you're waiting for dopy Joe to drive up the price of gas & groceries some more with his brilliant build back plans, so you can capture the taxes off the few grocery stores remaining in Jackson to push that chart off the right side.

Anonymous said...

Kingfish's reporting and his figures will be verified when the day comes, and it will, when the state is forced to take over Jackson.

Anonymous said...

How many (quantity) constitutes one throng?

Anonymous said...

The problem with JFP, Vice, Politico, etc is they are narrative-driven media outlets. They take their narrative and then build a story around it. Donna is quite the spin master and is an excellent writer. If she didn’t spin a story around her narrative she would be a hell of a journalist. But that just isn’t gonna happen.

Anonymous said...

The Harvey Johnson years were the most crucial time in Jackson history. It was then that the city adopted the overly optimistic attitude that Jackson had the unlimited resources to make make fundamental and systemic changes overnight without negative consequence. After all, we would now involve every segment of the city. Nobody would leave and new stuff would be coming. We started biting off far more than we had the lasting resources or the expertise to chew. Now the resources aren't sufficient and the expertise is lacking. We have to learn the hard way that improvement without maintenance is the road to failure. Or are we learning?

Anonymous said...

TAX THAT HAIR
Nearly everyone living in Jackson is wearing a small fortune worth of imported hair that they paid dearly to have elaborately woven into their scalp. This is a labor intensive process that is not cheap. Tax it.

Anonymous said...

Thank you, Kingfish for the honest, fact based reporting. It’s a shame that no other reporters else actually do the work to understand facts before reaching their opinion.

Anonymous said...

And then is the zoo - I still feel for the suffering animals that have no vote on their plight in life.

Anonymous said...

Keep up the good work and excellent, real, journalism Mr. Fish.

Very well done.

Anonymous said...

I abhor the fact that Tater signed the law that gave $3,000,000 to Jackson.

Hope we can get it back.

Anonymous said...

2:42 PM, dang, Shad's biographer right there. Congrats dude.

Anonymous said...

Kingfish, I shared your article yesterday & this is the response (posted below) from a friend of mine. Can you go back in earlier years & do the numbers?


_________you’re my soul sister, but the city is not operating at some crazy record high and the leadership in this administration is not corrupt.

Even From 2002 when he starts his budget analysis - which is 30 years into white flight - the state suffers an incredible loss in revenue.

213 million dollars in 2002 is equivalent to 314 million in 2021.

So the city lost 70 million in purchasing power in this time.

Jackson Jambalaya is trying to make you think what you think right now. He knows you have a desire to say it wasn’t white flight that killed jackson and you will want to defend the white people who left - who you have no reason to want to defend. You didn’t leave. You didn’t participate in a fear campaign. You don’t have anything to do with them leaving jackson 30 years ago.

Abd there is no statistic that will tell you a different central reason for Jackson’s decline aside fron white flight legitimately because there is no other central reason.

His article was total BS designed to make you feel lied to and put upon by Whiny progressives and angry, lazy Black people who are blaming you for something they broke.

Sounds like it worked.

But that doesn’t make it true.

White flight is not a moral judgement - it is a word applied to an economic reality. It happened and there are consequences and we are collectively living with them.

Anonymous said...

I will never understand how Jackson leaders proudly blame White Flight for failures after literally telling whites business owners to be quiet as they voice saftey concerns in council meetings etc.

You are literally admitting you cannot succeed with out the people you openly hate?

Anonymous said...

11:11 There was a very real phenomenon called "black migration". It is a historic fact, but those who migrated seeking a better life were not ALL black. Some were poor whites escaping rural poverty to find better opportunity in urban areas but because the vast majority doing so were black and so many whites stayed behind in their established communities, the migration is always attributed to black people. "White flight" is not ALL
white. Black people in lesser numbers but for the same reason also leave to find a better life but because most blacks are left behind the flight is attributed to white people. I live in a new community that is mostly white, but the black people that live on both sides of me rejected Jackson crime and dysfunction just like I did. LOOKING FOR A BETTER LIFE.I find no fault in that. Do you?

Anonymous said...

@12:48 I totally agree with you. I think there are many factors that have played a part in the demise of Jackson. I still live in Jackson but don’t blame anyone (no matter what race they are) for leaving. At the end of the day you have to do what is best for you & your family.

Anonymous said...

In response to the response at 11:11: Of course "white flight" was real, and of course it had an impact on Jackson. But, it was largely an effect, rather than a cause.

Jackson's population fell slightly for the first time between 1980 and 1990, then began to fall significantly after 1990.

https://en.wikipedia.org/wiki/Jackson,_Mississippi

The first 1/2 of the 1990s saw unprecedented rates of per capita homicides in Jackson, which corresponded with people leaving the city, many of them white.

https://www.wlbt.com/2021/01/01/jackson-closes-out-with-most-homicides-city-history-higher-rate-killings-than-new-orleans-memphis/

There are other plausible reasons people fled Jackson, including its public schools. "Mississippi Department of Education declar[ed] an emergency situation existed and request[ed] the governor declare a state of emergency so the department could take over the district."

https://mississippitoday.org/2018/11/30/while-officials-remain-optimistic-damning-report-highlights-jackson-public-schools-systemic-issues/

This as in spite of the fact that Jackson spends more per student than any other school district in the state, while spending far less on instruction, which strongly implies systemic mismanagement:

https://www.mississippimatters.info/single-post/2018/08/06/jackson-public-schools-only-spending-an-average-of-43-percent-on-instruction

Finally, Jackson is rated as the 3rd-worst-run city in the United States (behind St. Louis and Detroit):

https://stacker.com/stories/3283/worst-run-cities-america

So, yes, I do believe that Jackson's problems are largely of its own making. It is impossible to discuss "white flight" without implicating racism, which I have intentionally omitted for the foregoing comment. Suffice it to say that Jackson's population migration hasn't just been "white."

Anonymous said...

You have pointed out yet again how total mismanagement and corruption is the true reason for Jackson’s decline, I can foresee state intervention in the future

Anonymous said...

What happened to the Siemens settlement millions?


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