Maumelle delays vote on promotions tax

— Maumelle voters won’t be asked to decide on a new tax this year because there’s too little time to mount an informational campaign, a Maumelle Chamber of Commerce representative said Tuesday.

The new advertising and promotion tax was proposed for hotel rooms and restaurant meals. The Maumelle Chamber of Commerce was to have asked the Maumelle City Council to add the taxto the Nov. 2 general election ballot.

The City Council has authority to levy the tax, but Mayor Mike Watson has said that the city preferred to allow its voters to decide.

“We’ve decided at the present time that we really don’t have the manpower or the finances to get the information out to enough people to have a chance at passing it,” said Al Canelli, chairman of the chamber’s economic development committee. “ It’s just way too fast.”

The proposal called for a 3 percent tax on hotel stays and 2 percent on prepared food with tax revenue to fund city parks and recreation programs and to promote the city. There was no projection on how much the new tax could raise.

Canelli added that the project will be brought back in the future, but that there isn’t yet a time frame for that.

Advertising and promotion taxes are often levied on hotel and motel stays and on prepared foods sold by restaurants, delicatessens and other businesses. The revenue from such taxes is generally used to promote tourism and to help public parks.

Maumelle recently had its first hotel open and another is under construction. A number of restaurants have also opened in recent years. Maumelle has a 1 percent city sales tax.

The chamber held a public informational meeting on the tax three weeks ago. The meeting didn’t draw more than two dozen people and also didn’t get enough positive response to push the idea to a vote in November, Canelli said.

An exit poll at the meeting showed five attendees were for the tax, seven against and 10 or 12 were unsure, he said.

“Of course, any time you mention the word ‘ tax’ you’regoing to have opposition,” Canelli said. “We’re all in agreement that it would be pretty insane to try to do it in this short of a time frame.”

Judy Keller, Maumelle’s economic development director, said the meeting attracted “some stiff opposition” to the tax idea and to the city creating an Advertising and Promotion Commission that would oversee the tax and distribute its revenue.

“There was opposition to having an Advertising and Promotion Commission because some felt it [the commission] wouldn’t be accountable to anybody,” Keller said.

Supporters “just feel like it will take a lot more preparation to get out and let people understand what it’s trying to accomplish,” Keller added. “They don’t feel like they have enough time between now and the election to do that efficiently.”

There are 25 cities in Arkansas with advertising and promotion taxes, including most cities around Maumelle in central Arkansas.

Visitors to a city are most likely to be the ones paying the bulk of such a tax because of the inclusion of hotel and motel room rentals and restaurant meals. However, restaurant customers from inside the city also pay the tax.

Arkansas, Pages 11 on 07/28/2010

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