LITTLE ROCK — Little Rock Mayor Mark Stodola plans to ask the city Board of Directors to ask voters to extend an existing property tax millage to pay for capital improvements, he announced Tuesday afternoon in his annual State of the City speech.
He gave the speech, in which he outlines his goals for the coming year as well as highlights accomplishments of the past year, at the Dunbar Community Center at 1001 W. 16th St.
The mayor cited the city’s success in passing a 1 percentage-point sales tax increase in September and ended by asking for support to extend and reduce an existing capital improvement property-tax millage to raise about $105 million for additional road and drainage repairs. City directors would need to approve a special election for voters to consider the measure as a referendum.
In his speech Tuesday, Stodola said the capital portion of the recently approved sales-tax increase will result in about $72 million being invested in the city’s street and drainage needs.
“While this amount may sound good, and certainly is an improvement, please realize this total of $72 million is only 10 percent of the over $700 million in estimated costs for street and drainage improvements needed to fix the many problems citizens have brought to our attention,” he said before introducing the idea of the millage extension.
The city has not built any streets since 2007, Stodola said. He emphasized that the millage proposal could be instituted without raising taxes and would be a “tremendous shot in the arm” toward completing the growing list of road and drainage repairs needed on city streets.
The millage, which has been in place since 1958 through continued extensions passed by voters, is designated to pay for capital improvements. The current 3.3 mills is set to expire this year unless the board approves a special election, likely this fall, and voters approve an extension.
Between 2004 and 2007, $69 million was spent from the millage on capital improvements in various parts of the city, Stodola said, including $1.9 million to renovate the Dunbar Community Center, where he gave his speech Tuesday.
The mayor’s plan would reduce the millage rate from 3.3 to 3 mills and extend it for a planned 15 years. City Manager Bruce Moore said the current millage will sunset seven years ahead of schedule and would likely expire sooner than the planned 15 years because of projected property and population growth.
A mill is one-tenth of a cent, with each mill producing $1 in tax revenue for each $1,000 of taxable property.
Stodola said that for a $200,000 property, owners pay $132 annually under the current 3.3-mill rate. He said the reduction would meanthe same owner would pay $120 per year.
“There are a number of valuable and virtuous projects that I know are going to be suggested when we go into the ward meetings [to talk about the sales-tax priorities],” Stodola said. “The funding we have is not going to be enough. This would help out with all of those street and drainage issues that need our attention. In addition, I think it’s important to note that this will create new jobs in the city.”
At-large City Director Gene Fortson said the mayor’s speech was the first time he had heard about the millage proposal, but he supports the idea.
“I knew it [the millage] would be expiring soon, but the mayor presented an interesting possibility,” he said. “Anytime you can come up with a plan that decreases taxes and raises that much money ... I’m anxious to start talking about it.”
Fortson said the Board of Directors likely wouldn’t discuss the idea at the regular board meeting April 3, but said discussion on the proposal should begin soon.
The move comes just a few weeks after the Central Arkansas Library System successfully passed a bond refinancing issue that extended and also reduced its millage rate from 1 mill to 0.9 mills to pay for capital improvements and to buy books and other materials.
The move reduced annual taxpayer bills and similarly extended the life of the millage by four or five years and passed by a large margin, despite low voter turnout.
Stodola’s millage proposal comes only a few months after voters approved the city sales tax increase in September, which passed with about54 percent of the vote. Threeeighths of the tax increase is dedicated to pay for capital improvement projects, such as street and drainage projects, and will sunset at the end of 2021.
Don Zimmerman, executive director of the Arkansas Municipal League, said several millage issues have been approved by voters recently, but most of the millage trends as of late have been directed at police and fire pension funds.
He said most cities opt for sales-tax increases to pay for capital improvement projects because, unlike school districts which do not have a cap on their ability to levy millages, cities have strict regulations and caps on millages.
“There’s a 5-mill cap on general operations millage from a city, a 5-mill cap for libraries, a 1-mill limit for hospitals, 1-mill for police and 1-mill for fire pensions and so on,” Zimmerman said. “More cities have chosen to use sales taxes to fund capital improvements for that reason.
“Little Rock has used property taxes for a long time and just recently started using a sales tax. It seems like the reduction would give residents a break and give some funding for capital improvements, so I would think it would be a pretty popular proposal.”
Stodola also highlighted other efforts planned for this year, including:
Hiring 52 new police officers, some of whom will be on the street by October.
Hiring 20 new 911 operators.
Hiring 36 new firefighters.
Replacing the 20-year-old public safety communications tower.
Building the 12th Street police substation.
Locating the west Little Rock police substation.
Building the west Little Rock fire station.
Building the 12th Street senior center.
Front Section, Pages 1 on 03/28/2012