“Drafting a city budget is not getting any easier these days,” Mayor A.J. Holloway told a Biloxi Chamber of Commerce audience this week, and the budget Holloway proposed to the Biloxi City Council earlier this week contained something that hadn’t been seen in Biloxi since before 1992: a slight tax increase.
Councilmembers held their first budget session this week and have another scheduled for Tuesday .A final budget is expected to be approved in early September in order to be in place for Oct. 1, the beginning of Fiscal Year 2006.
Holloway has proposed a $108 million municipal budget, which includes $22 million for Biloxi schools. The mayor’s proposed tax increase would amount to slightly more than a dollar a month – about $15 a year — on a $100,000 owner-occupied home in Biloxi.
“Remember all of the figures you heard over the years?” Holloway asked the crowd of more than 100 at the chamber’s Breakfast With the Mayor session Tuesday. “We had anywhere from $40 million to $49 million to $60 million and $70 million just sitting in the bank. I think they said it wasn’t even drawing interest.
“I’m here to tell you something that I also told you was going to happen during the State of the City address earlier this year: That money’s gone.”
Holloway said much of the money – which had been borrowed – has funded such big-ticket projects as improvements on Popp’s Ferry and Cedar Lake roads, construction of Richards Drive, Jam Lane, Back Bay Boulevard and Caillavet Street, the Biloxi Sports Complex, and other improvements, such as new fire stations, elevated water tanks and also help fund day-to-day operation of city departments, which now include about 750 employees.
“We’re back in the real world,” Holloway said. “This proposed budget came in about $350,000 under the projected revenue – and that’s after I had the department directors go back two times to make 5 percent cuts in their proposals.
“We still have an ending fund balance – or surplus — of about $5 million, which, let me tell you, will run this city for about a month and a half. That reserve fund has usually been as high as $9 million each year.”
Holloway later pointed out that the city has reduced its tax rate six times in the last 14 years, and the proposed millage rate in the FY ’06 budget – 31.6 mills – is still less than half of the city’s millage rate in 1992, 63.06 mills.
After modest cuts to the tax rate in FYs ’95, ’97, ’98 and ’99, the city cut its tax rate in half in FY 2000, after countywide reappraisal saw property values skyrocket. The city’s property tax rate was lowered again in FY 2001 and has not changed since then.
The city derives its annual revenue primarily from the 4 percent tax on gaming revenue – which accounts for nearly $20 million, or more than a third of the annual revenue. Sales tax revenue accounts for almost a quarter of the city’s annual funds, and property tax amounts to less than 20 percent. The remainder of the budget is derived from fees, fines or state and federal grants.
Biloxians currently enjoy the lowest water and garbage fees of any city on the Coast, Holloway has said in the past, but he said some fee structures – such as a so-called tap fee paid by developers may be examined.
“We charge a $300 tap fee in Biloxi,” Holloway declared, “but you’ll find that fee as high as $1,000 in some neighboring cities.”
“Over the years,” Holloway told the chamber audience, “we’ve ramped up where needed to provide the basic services you expect from city government. Every time we build a fire station, that means we’ll need new trucks and equipment to put in that station. Then, we’ll need a staff of at least 12 new firefighters to man that station.
“When you see a new Donald Snyder Center or a new sports complex, that means we’ll need staff to operate it. We also took over water and sewer operations, and we took over the Port Division.
“We have held the line on fees for services, and, in fact, we abolished the registration fees in our recreation department, which has seen our participation double.
“We’ve done all of these things in the past while lowering your city taxes, and we’re working to maintain now.”
Holloway, noting that his proposed budget includes no new major improvement projects, said among projects he hoped to have in the budget are funds for demolishing the former Dukate school on Howard Avenue, which will be site of a new community center; and $2 million in water and sewer improvements.
You can read more City of Biloxi financial information by clicking here.