Since the fall of 2009, Delta Directions has worked with students from Harvard Law School to support for-profit and nonprofit entities in Mississippi focused on improving access to affordable, responsible financial services. In 2010, the Financial Services Initiative of the Mississippi Delta Project, a Harvard Law School student practice organization, was created to in order to institutionalize this collaboration and to ensure its sustainability.
Students have worked with the Institute for Community Based Research (ICBR) to develop a guide to community financial services for students at Delta State and for staff members of local nonprofits. In addition, students have collaborated with Southern Bancorp, the largest rural development bank in the country to support various community development activities, including free tax assistance and promoting historic preservation. In spring 2011, the Financial Services Initiative worked with the Mississippi Center for Justice to develop consumer education materials on payday lending and the Dodd-Frank Act. The team spent most of the 2011-2012 school year working with the Delta Regional Authority, the Small Business Administration, and ACCION USA as they started a new microfinance initiative in the Delta region. The work consisted of legal and regulatory research, policy research, and interviewing key stakeholders at banks and other organizations throughout the Delta.
In the fall of 2012, students developed legislation meant to facilitate the growth of microfinance and microlending in the Mississippi Delta region, with a focus on Arkansas. Work included research regarding regulatory obstacles and potential economic development programs as well as policy analysis to support the legislation. The team worked with local stakeholders in developing their recommendations. The following spring, the financial services team helped to develop policy meant to facilitate the funding of microfinance and microlending in Arkansas based on the legislation they wrote had written the preceding semester.
Delta Directions’ economic development publications and descriptions of its current projects can be found below, while summaries of its past projects can be found here.
Delta Directions’ local food systems work is also designed to increase economic development in the region. To learn more about these local food economic development projects, please visit our food systems page.
Ongoing Initiatives and Projects
Reducing Your Tax Burden: A Handbook for Municipalities
Delta Directions and the Mississippi Delta Project’s Financial Services Initiative are working to develop a handbook designed to help municipalities meet their tax obligations in an efficient and timely manner. While visiting parts of the Delta, members of the Initiative were able to hear first-hand accounts from mayors and staff of small towns about the economic and fiscal burden of tax liens on municipalities resulting from years of unpaid payroll taxes. The interest and penalties added to the original obligations can quickly overwhelm the town’s ability to service the debt, and anecdotal evidence suggests that it is not uncommon for towns with fewer than 1,000 residents to owe hundreds of thousands of dollars in back taxes.
The prevalence and persistence of this problem suggests that its cause is rooted in organizational gaps within town administrations. Communication between a mayor’s office and town clerk is often lacking, and few clear “precommittment” mechanisms exist to help towns budget appropriately. The Financial Services Initiative plans to help administrations avoid this crippling debt by establishing a handbook of legal, administrative, and organizational means for municipalities to ensure that IRS obligations are consistently met. As a secondary matter, the Team hopes to conduct research to determine just how widespread these tax problems are at the local level and how public policy might address this problem.