Washington County decision may hurt city roads

FAYETTEVILLE -- Mayors are asking justices of the peace not to take away $2.2 million they use for roads and transportation.

The Washington County Quorum Court will consider whether to zero out the 1.1 mills of property tax for roads split between the county and cities. The Quorum Court would then increase the millage rate for the county general fund to 5 mills from 3.9 mills.

By the numbers

As of this year, 62 counties levy a road millage rate higher than Washington County. The county had a lower general millage rate than 48 counties in Arkansas — that includes similarly sized counties. For example, Benton County has 5 mills for its general fund and a 1.9 road millage rate. Pulaski County has 5 mills for its general fund and 2.9 mills for roads. The maximum general fund millage rate a county can levy is 5 mills. The maximum road millage rate is 3.

Source: Northwest Arkansas Regional Planning Commission

Fast fact

The Washington County Quorum Court lowed its general fund property millage rate to 3.9 mills from 4.4 mills around 2010.

Source: Staff report

Regular meeting

The Washington County Quorum Court will consider its millage rate and 2017 budget during its regular meeting at 6 p.m. Dec. 15 at the courthouse at 280 N. College Ave.

Source: Staff report

Possible losses

The amount of money cities stand to lose if the county opts to zero out the road millage vary, but Fayetteville and Springdale would be hit the hardest.

Fayetteville — $1,175,677

Springdale — $783,303

Prairie Grove — $33,403

West Fork — $13,103

Lincoln — $11,516

Winslow — $1,821

Tontitown — $57,219

Farmington — $46,040

Greenland — $8,446

Elkins — $17,093

Elm Springs — $16,698

Johnson — $42,519

Goshen — $18,258

County Road Department — $1,338,003

Source: Washington County Treasurer Officer estimates

The result wouldn't change taxes for property owners, but it will take a hefty toll on 13 cities sharing the revenue with the county, mayors said. Cities that would lose the most are about $1.1 million for Fayetteville, about $783,000 for Springdale and about $57,000 for Tontitown, according to records.

Justice of the Peace Rick Cochran, a Republican who represents the area west of Farmington, proposed the millage swap during last month's Quorum Court meeting. Cochran didn't return a message left Wednesday.

The county has a $65 million budget for next year, with $61 million projected in revenue. The road millage brings in roughly $3.5 million, according to county records.

The county's spending gap will be covered by $12 million in carryover money, the comptroller and treasurer have said. Justices of the peace have said they're concerned about long-term finances and the loss of revenue as cities continue to grow and annex property from the county.

"As the cities keep getting bigger, the county keeps getting poorer," said Justice of the Peace Tom Lundstrum, a Republican who represents northern Washington County.

Partly, that's from city growth and reduced state money, Lundstrum said.

Washington County lost about $130,000 from 2013 to 2015 because of city growth, said Bobby Hill, county treasurer.

As the cities grow, the money the county gets from a 1 percent sales tax shrinks.

Before the 2010 U.S. Census, the county split a sales tax with the cities with about 24 percent going to the county. After the census, because of population growth in the cities, the split shrank to about 18 percent going to the county, Hill said.

Don Marr, chief of staff to the Fayetteville mayor, said the road millage money used for city streets benefits county residents who shop, go to school and work in the cities.

"We are part of the county," Marr said. "We all need each other. We are not independent."

After the proposal was tabled last month, Fayetteville Mayor Lioneld Jordan sent some justices of the peace and other elected officials a letter asking them to continue levying the road millage. It's the only letter or email received about the road millage issue, said Karen Beeks, executive assistant for the county judge.

Losing the money now, after the city's budget is set, would be "catastrophic," Marr said. The road millage makes up 17 percent of the city's fund to maintain roads, such as filling potholes, mowing and overlaying roads, he said.

Springdale Mayor Doug Sprouse said the cut will cost 8 miles of overlay work and could affect the city's work on Emma Avenue. The result will take a toll on the city's and the county's economy, he said.

"Roads mean growth," Sprouse said. "We can't take a big cut of three-quarters of a million, and it not impact our ability to do [road] projects that our residents want or need."

'Not uncommon'

Washington County won't be the first to lower or stop levying the road millage, according to a survey from the Northwest Arkansas Regional Planning Commission released this summer.

"It's not uncommon for this to be considered," said Jeff Hawkins, executive director for the commission.

Garland County doesn't levy the tax. Miller County adjusted its road millage rate, said Don Zimmerman, executive director of the Arkansas Municipal League. Benton County lowered its road millage several years ago after losing a lawsuit over how the tax revenue is divided with cities, Hawkins said.

Lowering the millage or doing away with it entirely could hurt those counties later, Zimmerman said.

State lawmakers are talking about not giving counties state turnback money unless a millage has been levied, Zimmerman said. The idea is if a millage isn't levied, then the county doesn't really need the money for its infrastructure projects, he said.

"It may be that they don't like their cities for some reason," Zimmerman said about Washington County possibly not levying the tax. "It sure won't help the relationship between the county and the cities, I don't think."

Lack of dialogue

The idea of cutting the road millage was brought up about five years ago, but justices of the peace dropped the idea after Springdale and Fayetteville mayors fought to keep it, Lundstrum said.

Last month, the idea was raised unexpectedly, without notifying mayors, and right before the Quorum Court was set to approve its millage rate and budget. The justices of the peace also unexpectedly shaved $100,000 from Ozark Regional Transit in November.

The combined moves bothered mayors and some justices of the peace.

Two justices of the peace texted Jordan from the Quorum Court meeting to warn him about the possible change in the road millage, Marr said. Jordan pointed out the problem in his letter, too.

"Our biggest concern is this recent pattern by some of the Quorum Court to make sweeping budget decisions without as much as a phone call or discussion with the municipalities who's citizens pay a very large sum of the county taxes collected," Jordan wrote. "We seek a partnership with the county and the elected JPs representing our city to have transparent and open discussions when affecting a city operation like the maintenance and care for our roadways."

Justices of the peace who support changing the millage rate don't agree with doing it suddenly, they said.

Lundstrum said the millage shouldn't be changed so late in the year when budgets are set and without notification to cities. The rate could be gradually reduced, maybe starting next year, he said.

"I think the county ought to have that money rather than the cities, but I don't think it would be fair just to change it overnight," Lundstrum said.

Bill Ussery, a Republican who represents northeastern Springdale, said the cities deserved to be notified because the change would "affect them in a pretty big way." Ussery is the justice of the peace who proposed tabling the idea in November.

The Quorum Court decided then to make the decision in December.

"It's not a good idea without talking to the cities," Ussery said. "It will help us financially, but we also might burn some bridges."

Ussery said he wanted to see a compromise. The millage-revenue split between the county and Fayetteville and Springdale could be revisited, he said. The county's two largest cities receive 80 percent of the road millage tax collected within their jurisdictions when the tax is generally split 50-50 between a county and cities, officials said.

"I think if we all work together, we will get ahead," Ussery said.

NW News on 12/04/2016

Upcoming Events