On January 11, 2018, The Mississippi House of Representatives passed an additional measure that will dedicate a new annual income stream to cities and counties for road and bridge maintenance.
House Bill 722 will create a new diversion of state use-tax collections, directing funds back to the cities and the counties to be used for road and bridge maintenance. This move is a redirection of existing dollars.
House Bill 722 passed by a bipartisan vote of 118-0.
“This is one of the best things we’ve done for local government,” said Speaker of the House Philip Gunn. “Our efforts will put money back in the hands of the local people. This increases the diversions back to cities and counties, which is something our mayors and supervisors have been requesting for years.”
Use-tax is gathered from sales tax collected on any out-of-state purchases, including those made online. Approximately $310 million was collected last year. The new diversion will divert 35 percent of use tax collections, which is approximately $108 million by today’s estimates. The diversion would be broken down as follows to be used toward road and bridge repair:
· 15 percent of all use tax collections (approximately $46.5 million by today’s estimates) of use tax collected will to go cities, dispersed in proportion with their current sales tax diversion
· 15 percent of all use tax collections (approximately $46.5 million by today’s estimates) of use tax will go to counties, dispersed according to their current state aid road formula.
· 5 percent of all use tax collections (approximately $15.5 million by today’s estimates) will fund an annual grant program administered through Mississippi Development Authority where cities and counties can request up to $1.5 million additional funding per road and bridge project.