Aldermen, mayor defend tax-anticipation loan
Published 12:00 am Thursday, July 29, 2010
NATCHEZ — Ward 6 Alderman Dan Dillard and Mayor Jake Middleton reiterated at Tuesday’s meeting that taking out a tax-anticipation loan was a smart business move.
The $650,000 tax-anticipation loan, which was approved by the board last week, is only 5 percent of the city’s operating income, and the city will be able to pay the short-term loan off by March, they said.
“We won’t pick up revenues until January or February,” Dillard said. “We have money to operate into October, and we will put off taking the loan as long as we can.
“We don’t have a rainy day fund. We are operating on a day-to-day flow.”
Middleton said the loan was needed to make sure the city could handle payroll.
“I have laid awake worrying about payroll,” Middleton said. “Sometimes people don’t understand how businesses are run.”
Dillard said payroll and benefits were $9 million of a $13 million total budget.
Middleton said there are $18 million worth of projects in Natchez right now.
“The money for those projects didn’t fall into our laps,” Middleton said. “Somebody worked hard for it.”
The tax-anticipation loan also is crucial in maintaining the city’s credit rating, Dillard said.
“The only thing worse than borrowing money is not being able to borrow money,” Dillard said. “If we threaten the city’s credit rating, we will be in bad shape.
“I don’t see any reason why we should be criticized for trying to protect the credit rating of the city.”
Ward 2 Alderman James “Ricky” Gray said he had called around the state and found out many municipalities are taking out tax-anticipation loans.
“It is normal for a municipality to take out a tax-anticipation loan,” Gray said.
Dillard said while the city has had to lay off 15 positions, other economies have had to lay off firemen and policemen, which Natchez has not done.
“Our economy has fared well,” Dillard said. “We have continued economic development in the area and continue to be the sole funder for public recreation.”
Middleton said continued negative criticism in the newspaper could scare away industrial development.
“I can’t tell you what they are right now, but there are industries interested in Natchez,” Middleton said.
Middleton said business owners read the newspaper every day, and if the newspaper is constantly on the attack and if the people of the town do not seem to get along, the businesses might chose to locate elsewhere.
Dillard agreed, saying The Natchez Democrat is losing its credibility with the stories on the tax-anticipation loan.
“There comes a point when you become a heckler,” Dillard said.