Change sought in low-income housing tax break law
JACKSON, Miss. — Mississippi’s county supervisors and other municipal leaders are asking legislators to rethink a 2005 law that gives a break to federally subsidized housing developments, saying schools and local governments are losing millions in tax dollars.
The law applies to so-called Section 42 developers who use federal tax credits to build rental complexes for people who qualify for work force housing. Under the law, the developers are assessed by the income generated from the rental units rather than the cost of the real property.
“If you go and raise taxes on people and they’re not able to recoup that expense, you can’t operate,” Milstead said. “Our people are paying taxes. It’s brought new revenue in the county because there were properties built that might not otherwise have been built.”
Milstead said the assessors initially agreed with the law, “but now they want more money, and this is not the place to get it.”
Milstead said his organization was meeting with municipal leaders in hopes of finding a solution to the lost revenue. Another hearing on the issue was scheduled for Thursday before the committee.
House Ways and Means Committee Chairman Percy Watson, D-Hattiesburg, said his committee would continue to investigate the issue. At least three bills have been filed to change the law.
“It’s definitely something that should come before the full committee,” Watson said. “They’re using it as a means to get around paying local taxes.”
AP
2/4/10
Magnolia Tribune
