‘Oh. Oh, Jesus’: Severe Budget Issues Facing Next Administration

The number that shocked a Jackson City Councilman 

Council members attempt to "move money" to cover expenses in 2025 budget negotiations last September. 

On Tuesday, April 22, Jackson voters returned to the ballot box to choose the city’s next mayor. But the leader they picked will be facing the same daunting money problems from last year, including pay raises the city will likely be struggling to fund, and money that simply isn’t coming in. 

Last September, the Jackson City Council included pay raises as part of the 2025 budget for the Jackson Fire Department, Code Enforcement officers, road and pothole crews, and city sanitation staff. Firefighters are expecting to see salary increases ranging from $4,500 to $5,500. 

“The city just does not have the money to do all the things we saying we’re going to do. And somewhere down the line, the city is going to take a major hit,” Kenneth Stokes told the council. “… A lot of information in this budget is wrong.

It’s not clear if these are among the raises federal investigators claim Jackson Councilman Aaron Banks was threatening to withhold (See page 15) from employees who were delaying a downtown development project Banks favored. (The “developers” in that project later turned out to be federal authorities posing as investors to ensnare Councilman Banks, Mayor Chokwe Lumumba, Hinds County DA Jody Owens and others.) 

That round of municipal raises will cost the city $1.7 million. The fire department closed 25 vacant positions and removed $137,000 from next year’s overtime budget to cover their increase, but that’s only a slice of the “raise pie,” and raises are not one-time expenditures. So any remaining drain they leave on the budget will inevitably come from the city’s 2026 general fund, if leaders fail to cover the repeat cost. 

Ward 5 Councilman Vernon Hartley assured BGX the raises are completely funded, and Council President Virgi Lindsay said the budget the council passed late last year was “balanced,” as required by law. But city budgets mirror your own household budget in that the revenue you’ve counted can only be a projection because you have not yet earned your money for the following year. 

Anybody watching the sausage being made during the Year 2025 budget negotiations last September might have noticed the frustration of council members trying to move money around to balance the budget before deadline. Even before considering the 2025 budget, the council first had to deal with pay raises approved for 2024 funded by one-time money from Entergy Mississippi. (The power company pays the city of Jackson $1.5 million per year for the risk of having the Grand Gulf nuclear power plant within blasting range of radiation, in the event of a meltdown or a terrorist attack, but that’s a different story. Don’t panic.) 

“The raises last year were paid for with one-time money from the Grand Gulf,” Deputy Director of Administration Sharon Thames explained to the council in the September meeting.  “… So that $6 million includes the fire department, the police department, PERS [Public Employees' Retirement System of Mississippi], $400,000 storm water (mitigation), $600,000 engineering consulting? … And that was proposed by the administration?” Banks asked. 

“That’s what it took to balance it,” Thames confirmed. At another scary moment, Banks and the rest of the council came face-to-face with a daunting negative balance on the city’s sanitation department. “Based on these calculations, sanitation is still negative $8 million and still has to be — there’s nothing balancing that out, correct?” Banks asked Thames (See the 10:18 mark)  Thames shook her head in answer. 

“Oh. Oh, Jesus,” Banks lamented.

Ward 3 Councilman Kenneth Stokes slammed the budget amid the wrangling. 

“The city just does not have the money to do all the things we saying we’re going to do. And somewhere down the line, the city is going to take a major hit,” Stokes told the council. “… A lot of information in this budget is wrong. We got a budget saying there’s money coming from the Mary Jones Center, but it’s almost completely closed. There’s no money coming from Mary Jones. There’s no money coming from Grove Park. … The major issue is if you compare the current budge to our proposed budget, you’re talking about being $100 million short.” 

Audits have revealed city managers sometimes do factor in unserious revenue while building budgets. In 2022, Scott Hodges, a partner with accounting firm Tann, Brown & Russ, said city officials spent millions more in water and sewer funds than they brought in by basing expenditures on the size of customers’ bills rather than actual money collected. 

An additional inspection also revealed city expenditures outpaced revenue, with the city ending the 2021 fiscal year with a $19 million deficit.  

To make matters worse, the bicker match between the city of Jackson and the JXN Water utility overseeing the city’s water and sewer division isn’t going anywhere, likely because JXN Water head Ted Henifin hasn’t yet come to terms with how much cash it really takes to run a city the size of Jackson. 

After years of failing to collect revenue from delinquent water customers, the Department of Justice transferred bill collection to JXN Water. And while Henifin has managed to increase collection rates to 70 percent, information requests show he is not charging nearly as much as he realistically needs for the city’s delivery system to sustain itself. Henifin plans a 25% increase in the volumetric rate across all plan tiers, raising monthly residential bills from an average $76 to $84, an increase of just under 12%. But even this will not easily cover the army of legal, auditing and other services the city of Jackson must perform. 

Water delivery is more than just dumping fluid from a faucet. The system needs auditors who research and compile information, and it needs lawyers who deliver that information to judges and the Environmental Protect Agency and other government entities demanding adherence to countless stipulations. And because the city requires attorneys and senior members in the Legal and Finance departments to work outside the scope of their duties, a portion of their salary must be allocated for that work. The city’s legal and accounting budgets contain a legion of little squares in Excel documents labeled “re-distributed salary” just for that purpose. 

Beyond lawyers and accountants, however, additional services include records management, purchasing, public building maintenance and countless little charges nobody notices until budget day. Without those overlooked services, however, people working at JXN Water couldn’t even collect their benefits or payroll. 

The city of Jackson foots the bill for this every month, but JXN Water doesn’t pay the City of Jackson for it, even though JXN Water is the sole agency charged with collecting the money. And in the absence of reimbursement, the city must fund these things from its general fund. That bill was roughly $3 million last year, as reflected in unpaid “franchise fee and indirect costs” that Jackson used to levy upon customers to fund these additional services. We’re in a new year now, and that gap is only getting bigger. 

As of now, Henifin doesn’t even collect franchise fee and indirect costs, so he probably won’t be paying them to Jackson in 2025. This means when the new mayor walks into the office after the June 3 election, he’ll get slammed by a snowball that’s getting bigger the further it rolls downhill.  And that hill is huge.