Holloway: Spending now outpacing annual revenue

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Mayor A.J. Holloway had a revelation for members of two Biloxi civic groups this week: The city of Biloxi is now spending more money than in takes in on an annual basis. And, Holloway says, that’s not necessarily a bad thing.

“We have what you could call an interesting situation here in Biloxi,” Holloway said in luncheon speeches to the Edgewater Rotary and Biloxi Businessmen’s Club. Some people think that with all of the growth that we’ve seen in the past 10 years, we have an excess supply of money in city coffers. Added the mayor: “Some of you may remember what I said when this issue came up before: ‘We’re healthy, not wealthy.’”

Holloway addressed the groups as he and City Council members work on a budget for the new fiscal year, which begins Oct. 1. Based on the current year’s budget, Holloway is forecasting flat revenues while the city continues work on a growing list of projects and new responsibilities.

The truth is, Holloway said, the city’s revenue in the past 10 years – money collected from property taxes, sales taxes, the tax on casino gaming revenue, and fees from licenses and permits – has more than doubled, while the city’s expenditures have almost tripled.

For instance, in fiscal year ’02, the city had $62 million in revenue and spent $72 million on services and major projects.

That’s not a problem because the city has saved money over several years to pay cash for some large projects, as well as used long-term finances uses long-term financing to help pay for such major projects, the mayor said.

“The work you’re seeing going on right now to widen Popp’s Ferry Road, the Caillavet Street re-development and the new Back Bay Boulevard is going to benefit us for years to come,” Holloway said, “so we’re going to be paying for it over the long term. In fact, we’re going to be using money generated by businesses locating on these streets to pay off the bonds.”

For FY ’04, which begins Oct. 1, the city’s budget is based on having operating revenue of $52.4 million. The budget relies heavily on gaming and sales taxes: 36 percent of the revenue is from the tax on gaming revenue. 22 percent comes from sales tax collections, and only 15 percent is from property taxes. The budget proposal includes no change in the city taxes paid by residents and business owners.

Holloway’s budget proposal also includes a capital projects budget of about $44 million. It funds continuing work on Popp’s Ferry, Caillavet and the sports complex, and includes
construction of new fire stations on the east end of Biloxi and in Woolmarket; continuing work on installing water and sewer systems in Woolmarket; repairing bridges on Lorraine Road and Bayview; and continuing drainage work in Petit Bois and Sunkist.

Said Holloway to audience members: “Our challenge is drafting a budget that includes all of those new things, providing the level of service that you and your neighbors have become accustomed to, and doing it all with the same revenue levels in the current budget – and doing it without any new taxes.

“The notion that Biloxi is flush with money is offset almost immediately by the fact that we are flush with responsibilities. It’s not easy to get people fired up about a ribbon cutting at a water well, or constructing a new one-million-gallon water tank like the one at Cedar Lake and I-10, but these things and the new roads and new schools are vitally important to continuing the growth of the economy here in Biloxi. And that benefits everyone.”