OCEAN SPRINGS, Mississippi — More than two years since the issue first came to light, the City of Ocean Springs and its school district are still at odds over what to do about nearly $720,000 in past ad valorem tax penalty and interest money the district says the City owes.
"The short answer is it hasn't gone away," said school district attorney Alwyn Luckey when asked about the status of the situation. "There's been no continuity in the discussion."
Each year, the Jackson County Tax Collector's office collects ad valorem (property) taxes for Ocean Springs and its school district, as it does for Pascagoula and Gautier. Moss Point is the only Jackson County municipality which collects its own taxes.
When a property owner within the city and/or school district is late in paying ad valorem tax, however, a 1 percent per month penalty is assessed in addition to the base amount. The state enacted a law allowing for such penalties to be assessed in 1972.
The city receives the monthly collections from the county tax assessor and then distributes the school district's share. The city has never, however, given the district a share of the 1 percent penalty money.
In a letter to city attorney John Edwards from Oct. 14, 2013, Luckey outlined the issue.
"As to the unpaid taxes penalties and interest from past years," Luckey wrote, "we are aware that the total unpaid amount is $719,888.92 for the five (5) years for which the Jackson County Tax Collector had easily accessible information. Mindful the City does not have $719,888.92, and likely more than that is owed, we would be open to suggestion as to the best way to repay this amount."
Last year, the two sides met to discuss the issue and did reach an agreement in which the City will pay the penalty and interest money to the school district each year going forward.
Based on a Mississippi Attorney General's opinion, the two entities entered into an interlocal agreement with the Jackson County Tax Collector through which the City and school district will evenly split the P&I money and the school district's share will be paid directly from the tax assessor to the district -- although the City, as the tax-levying authority, will still be considered responsible for the distribution of tax payments to the school district.
But City officials have steadfastly maintained they have no intention of paying the past due amount.
"The board (of aldermen) has instructed the city attorney to send the school district notice that we have no intention of paying that amount because there is no statutory requirement to do so," said Mayor Connie Moran, adding she was unsure if that notice had been sent yet.
A 2000 AG's opinion, however, says otherwise.
"It is the opinion of this office that any interest collected pursuant to Section 27-41-9 on delinquent taxes payable to the municipality should be placed into the municipal general fund. Interest on delinquent taxes payable to some other entity, such as ad valorem taxes for school purposes, but levied by the municipality, should be paid to that entity, as those taxes are not payable to the municipality."
In addition, a July 11, 2014 AG's opinion also seems to side with the school district's position, indicating the school district is entitled to its share of the P&I revenues even if those revenues push the district beyond its state-mandated 55-mill tax threshold.
"Any penalties and interest on delinquent tax payments on the tax levy, excluding any penalties and interest paid on levies for costs of collection, may be paid to the school district," the opinion states.
Luckey said he is hopeful of coming to a resolution acceptable to both parties.
"We're trying to come to a fair resolution in an amicable way," he said, adding he anticipates discussions restarting after school resumes next month.
Information from: The Mississippi Press, http://www.gulflive.com