Mayor George Flaggs Jr. said he believes the City of Vicksburg will be able to absorb the approximately $740,000 loss in property tax revenue stemming from the 2021 closure of Entergy’s Baxter Wilson power plant on Kemp Bottom Road.

“It’s just hitting us this year,” Flaggs said after the city approved a $31.376 million budget for fiscal year 2025, which begins Oct. 1. “It’s going to be somewhere between $740,000 and $750,000. But we have a safety net in the reserve fund of around $1.5 million and, with the rise we saw in tax revenue, we think we’ll be okay.”

The FY 2025 budget included a projected hike in both ad valorem collections, which includes real estate property taxes, personal auto tax and business personal property tax, and in retail sales tax collected. Ad valorem and retail taxes make up two of the three largest revenue sources for the city, along with gaming, which is projected to see a slight dip in FY2025. 

Doug Whittington, director of accounting for the city, said ad valorem tax collections are projected to jump by $86,000 in the new fiscal year, while retail taxes are expected to see a $300,000 rise in collections. Gaming revenue is expected to dip from $5.865 million in FY2024 to around $5.79 million in FY2025, a 1.286% decrease.

Whittington said it is important to note that projections include the month of September 2024 for both ad valorem and retail sales tax, while gaming revenue collections will stretch through October 2024. 

Flaggs said the plant’s deactivation came as Entergy announced a decision to shut down some of its aging natural gas power generating plants in an effort to replace them with renewable energy sources, such as solar power. The city lost $1.4 million in property tax revenue when Entergy closed the plant’s Unit 2 in 2019, before deactivating Unit 1 in 2021.

“We took our greatest hit in 2019,” Flaggs said following the announcement of the Baxter Wilson closure in 2021. “So between revenue growth and some other things, I think we can absorb that; we’ve just got to keep moving. I’m working with (Entergy) continuously and Baxter Wilson has been a very good corporate partner to this community. I’m just glad they gave us enough notice to adjust.”

 This week Flaggs said he believes the city will also be able to absorb the latest revenue loss, the effects of which are just being felt in 2024. Baxter Wilson continued to pay property taxes through 2023.

“We’ll be able to absorb it either one of two ways,” Flaggs said. “One is through revenue growth, because sales tax and property tax is growing. Two is that there is the safety net in the reserve fund. We won’t actually know exactly how it will affect us until about July.”

By that time, Flaggs said, city officials will know if projected tax increases alone filled the monetary void left by Baxter Wilson, or if the reserve fund will need to be tapped.

Flaggs also said recently approved pay raises for city employees added to the monetary gap in the budget, but was a need officials felt had to be met.

“We probably could’ve gotten there without the pay raises,” Flaggs said. “The pay raise is about $407,000. But, in order to give those persons that make less than $50,000 a year, which I believe was significant, and raise the minimum wage, we decided that that would be in the best interest of the budget.

“Regardless. I think this is the best course of action moving forward and I’m confident that we are going to make it one way or the other.”