Bill strengthening reporting requirements for one-percent tax clears Senate

JACKSON, Miss. (WLBT) - A bill that could withhold one-percent revenues from the city of Jackson for failing to provide the state with an annual audit has cleared the Senate.

Tuesday, lawmakers in the state’s upper chamber passed H.B. 1168, a bill that strengthens reporting requirements for the city in terms of how it uses revenue from a special infrastructure sales tax.

The bill initially would have directed all one-percent funds to go to city water and sewer projects.

However, a “strike all” approved by the Senate removes that provision and adds language designed to hold the city more accountable in spending the money.

“It does require them to provide an audit and report to the Senate and the House, and if they do not comply with that, the Department of Revenue can hold the payments until they receive written notice the municipality has complied,” Sen. Josh Harkins said.

The tax, which is placed on certain commercial transactions in the city limits, generates more than $14 million a year – funds that can be used solely for infrastructure.

The amended version also mandates the city provide one-percent oversight commissioners with more detailed monthly reports and any expenditures not approved by the oversight members must be reimbursed to the one-percent account.

Legislation authorizing the tax years ago put a 10-member commission in place to govern how the city spends it. Revenues must be spent in compliance with a master plan approved by oversight members.

The bill was passed after relatively little debate.

District 26 Sen. John Horhn asked if commissioners had any reason to believe funds had been used for projects other than those they had approved.

“I was told anecdotally they’ve spent more on projects than was approved and maybe [some money] had gone to something that wasn’t necessarily on their list,” Harkins said. “This just makes sure [the city] abides by what the master plan has approved.”

The commission and city leaders have been at odds numerous times over the years.

In early 2021, members sent a letter to Mayor Chokwe Antar Lumumba the city needed to repay $20 million in funds that were loaned to the city between March 2018 and October 2019.

Funds were loaned to the city to help cover the costs of restoring water service following the 2018 water crisis, repairing collapsed sewer mains and continuing program management services for its sewer consent decree.

Minutes show the allocations were made with the city understanding they were a loan, but the city has refused to pay them back.

The city’s failure to repay the money aside, a portion of the funds that were supposed to go to consent decree program management services were used elsewhere, and the city again returned to the commission for more funding for program management.

Commissioner Pete Perry supports the increased reporting requirements, says he’s had to file public record requests to get information on spending.

“I was having to keep my own set of books because you couldn’t find out from the city what it had spent on any particular project,” he said. “We want it like a checkbook - who did you write a check to, for how much, and for what project?”

Vote totals were not posted on the Legislature’s website. Several members of the Jackson delegation voted present, including Sens. John Horhn, David Blount, Hillman Frazier and Sollie Norwood.

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