A Sunflower County circuit judge signaled in a message to attorneys that she is likely to rule Indianola did not follow state law in adopting its current budget and tax levy.
In a message to attorneys Monday, Circuit Judge Carol L. White-Richard said she will deny the city’s motion to dismiss a taxpayer appeal filed by Indianola resident James Failing and plans to issue a written order, according to an email from attorney John Scanlon reviewed by The E-T. The statement is not a final ruling because no order has been entered on the docket.
Under Mississippi law, municipal budgets must be approved by resolution and entered in detail in the city’s minutes before Oct. 1 each year, and cities are not allowed to spend money after that date until a budget is adopted, according to Mississippi Code Section 21‑35‑9. Budgets must also be “prepared” by Sept. 15 and adopted no sooner than one week after a properly noticed public hearing, although tax levies can be set the same night as the hearing.
White-Richard said that the city’s Sept. 26, 2025, vote to adopt its budget and tax levy did not meet legal requirements for public notice and a hearing. She said the action lacked substantial evidence, was arbitrary or capricious, and exceeded the city’s authority.
Failing, a city taxpayer, appealed under state law after Indianola leaders advertised a public hearing on the proposed 2026 fiscal year budget and tax increase, then voted on the spending plan and millage rate earlier than the public had been told. The city had published legal notices stating that a public hearing on the budget and proposed tax increase would be held Oct. 6. Instead, aldermen adopted the budget and tax levy on Sept. 26, the same day a notice was scheduled to run, without holding the advertised hearing.
Failing’s attorney, Scanlon, countered that the city’s failure to follow statutory notice and hearing requirements deprived residents of basic due process and made it impossible for his client or other citizens to know when the decisive vote would occur. Scanlon said Failing acted as soon as he learned what the board had done and that taxpayers should not lose their right to challenge an unlawful action simply because officials did not follow the law and, in this case, publicly noticed a hearing for Oct. 6 that never took place while instead adopting their budget and levy at a meeting with no notice and no public hearing.
The section of state law governing city budgets, Mississippi Code Section 21‑35‑9, lays out the procedures for adopting a budget, including a formal vote and detailed entry in the minutes before Oct. 1. Although the city technically acted before that deadline, Scanlon argues that doing so without the required notice and hearing left limits on what taxes the city could collect, including car-tag revenues, and how it could spend public funds until the process was completed properly with all required notice and a public hearing.
White-Richard’s preliminary findings side with Failing on the key issues of notice and the city’s authority, according to an email she sent to lawyers. She said any remedy would be limited to a refund of any increase in Failing’s city taxes from the last budget year. Since the city adopted the same millage rate as the previous year, that refund is expected to be zero.
Even so, the case could affect how Indianola and other local governments handle budgets in the future, particularly when setting tax rates. A final court order may clarify how strictly municipalities must follow notice, timing, and public-hearing rules.
The judge’s email does not by itself change the city’s budget or tax levy. Until White‑Richard’s opinion and order are signed and entered into the court record, her comments remain a preliminary indication of the direction she is leaning rather than a final ruling.
