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Posted on April 6, 2022 at 5:58 PM by Melitta Duncan
The City of Southaven experienced a huge win last week with the passage of SB 2512 which is a local and private bill that extended the 1% restaurant tourism tax, commonly referred to as “A Penny for Your Parks”, for another 4 years until June 30, 2026. We are blessed with some local state legislators who have developed quality relationships in the State Capitol and who all played a key role in this success. Senators David Parker, Kevin Blackwell, and Mike McClendon as well as House Representatives Jeff Hale, Hester Jackson-McCray, Jerry Darnell, and Bill Kinkade have proven to be big assets and very effective for Desoto County. Key business leaders in our community also leaned on The Capitol to support our park enhancement funding and its impact on our local economy.
Unfortunately, there are a few House Representatives from Desoto County (shown in “red” in the photo below with “Nay” votes to our bill) who vote “Nay” to other local and private bills like ours throughout the state under the guise of fighting tax increases. This is the main purpose of my message today.
Before I get into the facts of why a tourism tax is not a tax “increase” for Southaven citizens and why parks and recreational opportunities benefit every Southaven citizen financially, let me summarize the general purpose and importance of parks and recreation. I could write a book on this, but will just summarize today. Parks offer opportunities for our kids that create life-long benefits and move them away from so many dangers that try to trap them now. Although Southaven offers a wide array of sports options for kids of all skill-sets and development levels, our parks program is much broader than just sports. Playgrounds, walking trails, lakes and other natural surroundings, and a premier outdoor music entertainment venue have something to offer everyone. In general, parks promote a healthier lifestyle and general well-being for people of all ages and interests.
Now, if you don’t believe what I just told you and your argument is still that we don’t need parks, listen up and let’s just “talk money”. In Southaven, general sales tax revenue generated in 2012 was $12.4 million. In 2022, we are projected to finish the year with $18.2 million (excluding internet sales)! This is almost a 50% increase which shows incredible economic growth, all while having zero increases in the property tax millage rate! The investment in our parks and recreational opportunities has played a significant role in this growth by drawing tourism and making our city more economically attractive. Now, you may say, “why don’t you just fund park enhancements with these new sales tax dollars?” We certainly can, but we’ve used this additional revenue for amenities city-wide such as massive increases in public safety and infrastructure allocations. Specifically, our Police budget has grown tremendously because it simply has to in today’s world! We have also increased our street resurfacing budget over 800% since 2012. Funding parks with this revenue pulls allocations from these much-needed priorities. Here’s where we “plug-in” tourism tax revenue.
The history and facts about “A Penny for Your Parks”…
Southaven’s restaurant tourism tax was first approved by the voters with no repeal date in 2010 followed by another referendum in 2011 mandated by the State Legislature. The repeal date was added in 2011 and is a common practice of the Legislature for a “checks and balances” purpose to make sure the tax revenue is spent properly, not to end the tax. Many, if not all, get extended except when the local delegation fights their own bill, which is almost unheard of until recently. A tourism tax allows a city’s park amenities to be paid partly by people who don’t live locally, but still enjoy the amenities of the local city. Removing these doesn’t decrease taxes, but instead transfers 100% of the cost on its own taxpayers. In the first year of collections in 2012, the tourism tax produced $959,000. The last full year, it will produce approximately $2.7 million. If this tax were removed and this revenue source replaced with general fund dollars, it would cause the average Southaven property taxpayer to have an increase of $150 annually ($2.7 million divided by 18,000 properties). A household would have to spend more than $15,000 annually at Southaven restaurants for the tourism tax (1%) to cost the taxpayers in that given household more than removing it and funding parks with general fund dollars. I venture to say that no Southaven resident spends more than $15,000 annually at Southaven restaurants.
In summary, every citizen benefits financially from our parks, whether you use them or not. Removing our tourism tax funding would not decrease any Southaven taxpayer’s taxes. Instead, it would only decrease the taxes of tourists to our city who will then use our amenities without paying their part and transfer the tax burden 100% to our own citizens.
Park enhancement and tourism taxes are a “win-win” for Southaven!