Plans for sales tax referendum put on hold
Mayor George Flaggs Jr. is withdrawing his plans to seek a local and private, or special bill, calling for a public referendum to levy a 1-cent sales tax increase to fund capital improvements.
Flaggs said Thursday he planned to have the Board of Mayor and Aldermen approve a resolution to submit the bill during the present session of the Legislature. Friday, however, he said he was pulling the item from the agenda for Tuesday’s board meeting after learning the board was split on the issue with North Ward Aldermen Michael Mayfield supporting the plan and South Ward Aldermen Alex Monsour opposing it.
“You have a general (fund) budget that allows you to take care of what you need to do on a daily basis,” Mayfield said. “It allows you to operate the city without being in debt to do so.”
But once the board looks at projects that are outside the capacity of the general fund budget, that’s when it considers having to borrow money or hold referendums to raise taxes, Mayfield said.
“The one cent will go toward a variety of things we have to deal with in the city,” Mayfield said.
“I think this year has been extremely tough on the taxpayers — COVID 19 and the effects of it — and I don’t think this is the appropriate time to be looking at a tax increase on people,” Monsour said.
Flaggs said the differing opinions of Mayfield and Monsour led him the reconsider moving forward with the proposal, for several reasons.
“Because I believe in a unanimous board and I’ve got a 99 percent voting record with my colleagues, there’s no need to create division on the board,” Flaggs said. “If the board can’t agree the citizens are not going to agree.”
Also, he said, a local and private bill is not going to pass in the Legislature if it doesn’t have the unanimous approval of the board, “So it’s a no-brainer for me.”
Flaggs introduced the idea for a 1-cent sales tax to fund capital improvements in 2018. The Board of Mayor and Aldermen in January 2020 approved a resolution seeking a local and private bill for a referendum to levy the tax but the proposal never made it to the House and Senate Local and Private committees.
The plan proposed for the Tuesday meeting was similar to the 2018 proposal and would have exempted food and beverage sales at restaurants and bars and hotel room rentals.
Under the new proposal, Flaggs said he was considering raising $11 million and leveraging it to borrow money for capital improvements citywide.
“This is consistent with my political philosophy in that I don’t believe in raising revenue myself but if the people want to raise revenue themselves they can,” Flaggs said before withdrawing the proposal.