Department of finance to oversee capitol complex district
Millions of dollars will soon flow into the capital city to help with its crumbling infrastructure.
However, Jackson city leaders will have to settle for an advisory role, rather than a controlling one, in determining how that money is spent.
State lawmakers recently approved HB 1226, creating the “capitol complex improvement district” (CCID).
The legislation sets boundaries for the district, and includes a mechanism to fund road, water and sewer upgrades within it. Beginning in August 2018, the bill will require the state to set aside millions of dollars a year to help pay for those improvements.
The funds will ultimately be controlled by the executive director of the Mississippi Department of Finance and Administration (DFA), not the mayor and city council.
The mayor, council and public works director will have seats on a special advisory board charged with helping DFA draw up a plan to prioritize improvements, but will have no say in the bidding or contracting process, according to the legislation.
The panel will include nine members, two of whom to be appointed by the governor, and one each to be appointed by the lieutenant governor, speaker of the House, mayor, city council, public works director, president of Jackson State University, and vice chancellor of heath affairs with the University of Mississippi Medical Center (UMMC).
Members must be residents of Jackson and are prohibited from simultaneously serving on the city’s one-percent infrastructure sales tax oversight commission.
The panel will serve strictly in an advisory role, and has no other authority than helping draw up the master plan, according to the bill’s author, Rep. Bill Denny.
The law goes into effect on July 1, 2017, but no money will be allocated until August 2018.
For the first year, about $3.2 million will be set aside for CCID use. In year two, the state will allocate $7 million, and from year three onward, will allocate $11 million for CCID work.
Monies will come from sales tax revenues generated within in the city limits. The allocation will not impact the diversions the city already receives from its sales tax collections, Denny said. .
Initially, Denny sought a 12 percent sales tax diversion, which would have generated around $22 million a year. However the amount was reduced in conference committee as a compromise between the House and Senate.
In year one, the district will receive a 2 percent allocation, which will increase to 4 percent in 2019 and 6 percent in 2020.
“The Senate initially said they would (not pass the bill) because of the shortfalls in the budget,” Denny said.
Funds can be used for street, bridge and drainage work, replacing and installing street lights and traffic signals, adding or rehabbing water and sewer lines serving state buildings, repairing and reconstructing parks, public rights-of-way and sidewalks, improving landscaping, and relocating utilities as needed.
DFA is not required to obtain approval from Jackson before doing work, but must coordinate with the city of Jackson and one-percent commission “to the greatest extent possible,” according to a copy of the legislation.
Also, DFA must work to incorporate the needs of other state agencies, including JSU, UMMC, and the Mississippi Department of Archives and History, in the master plan.
Eighty-five percent of CCID funds must go toward infrastructure, while 10 percent can be used to reimburse Jackson for providing fire and police protection within the district. The remaining five percent can be used by DFA for administrative and implementation costs.
The CCID was created, in part, to help offset Jackson’s losses from tax-exempt properties.
According to a 2009 study conducted by JSU and Downtown Jackson Partners, more than a quarter of properties in the capital city were tax-exempt. Of those, 30 percent are owned by the state. A current figure was unavaliable at press time, but the number of tax-exempt parcels has likely grown.
Jackson receives no tax revenues from tax-exempt properties, but still must provide fire and police protection and maintain the roads, water and sewer lines serving them.
The CCID takes in a large number of state-owned sites, including UMMC, JSU, the Mississippi Research and Development Center, most of LeFleur’s Bluff State Park, and the Mississippi Capitol Building.
In addition to coordinating with other agencies, DFA is also being charged with encouraging major firms to contract out to minority and disadvantaged firms on CCID work.
The House approved the measure 105-13, with two representatives abstaining and two others voting present. The bill cruised through the Senate 42-1, with five members abstaining.