LITTLE ROCK — Little Rock Mayor Mark Stodola is advancing his plan to have the city directors set a Sept. 13 special election for a sales-tax increase, and Tuesday he and the city manager will give the board a first look at plans for the money if the measure is approved.
Stodola was still playing things close to the chest Friday, but he did say that the city’s Police and Fire departments, where union contracts require pay raises next year, would be high on the list of priorities.
“More specifics will be identified on Tuesday. Hopefully, we’ll be able to say here’s what we think we can do,” he said, noting that he and City Manager Bruce Moore plan to lay out how the money would be divided between operations and capital improvements.
High on the list of capital improvements will be the construction of new fire stations and renovations to the police headquarters, Stodola said.
“We have a 60-year-old broken-down Police Department headquarters building with mold that’s beyond its useful life,” he said.
No decision is expected during the meeting that will take place after the regular agenda items have been taken care of Tuesday. Stodola said the city directors have until July 19 to call the election, as state law requires at least 50 days’ notice ahead of a vote.
“Once it’s framed up, there’s a desire that we go back to our various wards for public input,” Stodola said. “I think that’s plenty of time to fashion an ordinance.”
The city manager is forecasting an $8 million budget shortfall in 2012 without an increase in revenue. Contacted Friday, six city directors said they want specific costs of projects on Moore’s list of capital priorities as they weigh the options before them.
Directors asked the city manager to identify what could be done if the city sales tax were raised by 1 percentage point to 1.5 percent. The existing half-percent city sales tax, enacted in 1994, raised $22.7 million for the city in 2010.
Nearly two dozen city employees were laid off to balance the 2010 budget, and nearly 200 job positions have remained vacant in recent years to help balance the budget. Little Rock also has used$4.2 million in one-time funds that can’t be duplicated in 2012 and has employee union contracts requiring 3 percent raises next year.
Moore used $4.2 million in transfers from other departments and leftover money from 2010 to balance the city’s $134.4 million general fund this year - money that Moore and others say won’t be available in 2012. The city also will have to find more money for pay raises agreed to several years ago in employee union contracts for the Police and Fire departments.
On Friday, each city director also acknowledged that infrastructure projects - streets and drainage; public safety, such as police and fire personnel; and economic development - must be high on any list of priorities.
At-Large Director Joan Adcock said Friday that she wants to see more than specific projections about how to spend the money generated by a sales-tax increase.
“I want to be very realistic. If the election is Sept. 13, the budget process begins soon after that. Mr. Moore needs to be thinking if we don’t get the tax, what cuts are we going to be looking at,” she said. “I’m not trying to scare anyone, but $8 million in cuts is going to have to come out of people, not just services.”
Ward 2 City Director Ken Richardson said one thing he hopes to see expressed in theplan is a big-picture approach to public safety.
“Public safety is usually discussed in terms of more police and bigger jails,” Richardson said. “That’s not comprehensive. We need community-building, alternatives to incarceration, employment opportunities for those recently released from the penal system. It will really be interesting to see how that gets tied in, and I mean in a real substantial way, not just some symbolic funding or gesture.”
City Directors Lance Hines, Stacy Hurst and Gene Fortson on Friday had a sense that most residents support the sales-tax increase. The city board held a “listening tour” of town-hall meetings in each of the seven wards to gather public input.
“My citizens have expressed to me that they want to see what’s going to be done in Ward 6 and that they will support it if we can show them what we’re going to do and assure them that we’re going to do what we said we would,” City Director Doris Wright said.
Despite being the largest city in the state, Little Rock collected $10 million less than smaller cities such as Fayetteville and Fort Smith last year. Those cities, and smaller cities surrounding Little Rock, levy two to four times the amount the capital city does.
The average local sales-tax rate in Arkansas is 2.1 percent, according to the Tax Foundation, a nonpartisan tax-research group in Washington, D.C. The state also levies a 6 percent tax on most goods and services.
The city also collected $38.4 million from its share of Pulaski County’s 1 percent tax. Sales-tax revenue accounts for nearly half of the $134.4 million budget.
The last time city leaders went to the public for a tax increase was in 2003, when they proposed $69 million worth of improvements to roads and police, fire and park facilities. Voters approved the measure - and continued a property tax about to expire - by a ratio of 3-to-1. Little Rock’s sales tax rate has not increased since voters enacted it.
Front Section, Pages 1 on 06/06/2011