The State Auditor’s office has released an analysis of Mississippi’s capital city showing a concerning financial situation for Jackson and its residents.
The situation details issues spanning over the last two decades that are connected to the city’s population loss, increasing expenses, and a substantial amount of unpaid water bills.
“While my office is legally prohibited from auditing cities, cities like Jackson are audited by private CPA firms,” State Auditor Shad White said. “We can, however, analyze the results of city audits. Our analysis of Jackson’s audits shows serious and fundamental financial issues that have to be straightened out. Every concerned taxpayer should be reading this report.”
The analysis highlights key problems, such as:
- Despite a population loss since 2003, Jackson’s revenue continues to increase.
- Continued revenue increases are being outpaced by expenses.
- The city’s largest source of revenue, property taxes, is being paid by fewer individuals.
- There has been an explosion of unpaid water bills. The city’s accounting treats many of these bills as if they will never be paid.
- The city is not collecting all its water bills, and if it does not collect water bills, it does not have the revenue to fund day-to-day operations.
- The General Fund and Siemens settlement dollars are footing the bill to keep the water system functioning.
- There has been a large increase in water connections added by the city despite population loss.
According to the audit, Jackson’s average daily water consumption has increased 245 percent since 2003 while the revenues for the water department have declined. The report adds that “either Jackson is not reporting water consumption correctly, the city is losing water through leakage, the city is not properly billing residents for water usage, or a combination of all three.”
Similarly sized cities, such as Savannah, Georgia, and Pasadena, Texas, are shown to collect more water bill revenue while consuming less water than Jackson.
Those same cities also report that they operated with almost $10,000,000 in profit in the 2021 fiscal year, while Jackson operated with a $27,681,000 loss. In an effort to compensate for the financial deficit, Jackson borrowed money, spent existing cash reserves, and transferred money from other funds.
“Jackson is our state’s capital, and we cannot have a strong state without a strong capital,” White added. “Cities in other Southern states, like Atlanta in Georgia or Birmingham in Alabama, are growing fast and fueling the economies of their states. Jackson can generate growth for Mississippi, but not until it gets its fiscal house in order.”
