Mayor talks up tax rise in North Little Rock

He says revenue needed to thrive

Mayor Joe Smith told about 50 people at a town-hall-style meeting Wednesday evening that North Little Rock cannot be a progressive city without finding new revenue to help pay for the services it provides and to improve city streets and the police and fire departments.

The meeting, the first of five scheduled through next month, was to show the public why North Little Rock will ask city voters to approve a 1 percentage-point city sales-tax increase in an Aug. 8 special election.

Proceeds from the additional tax would be divided into two parts: One-half percentage point would be a permanent tax to fund North Little Rock's general operations; the other one-half percentage point, to last for five years, would go toward improving streets and drainage, and to make improvements at city fire stations and a new or renovated police and courts building.

The tax is projected to provide North Little Rock with an extra $16 million annually. If passed, the tax would start being collected Jan. 1.

"If you're not moving forward, you're backing up," Smith told those assembled at Lakewood United Methodist Church. "We can't go forward without more money."

The next town-hall-style meeting will be at 6 p.m. June 29 at Sherman Park Recreation Center.

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The audience asked about the lack of Internet sales-tax collections -- something Smith said costs North Little Rock possibly $1 million a year in lost tax revenue -- and whether the city has been using its money, and its employees, in the most efficient manner.

Doug McDowall expressed his dismay to the mayor about some businesses that don't remit their sales taxes collected as required, citing a Little Rock restaurant recently shut down by the state for nonpayment of state taxes. By state law, individual businesses' collections aren't revealed to cities.

"I will vote for it," McDowall said of the tax increase. "I think it's needed and well-thought-out. I do not want to see us be put at a competitive disadvantage."

A couple of questioners weren't sold on the new tax, they said afterward.

"I'll work as hard against it as the mayor does for it," said Cal Dring, who peppered the mayor with questions. "I think if you look at the taxes we're currently paying, what I question is if those tax dollars are being well spent. It doesn't matter how many tax dollars they receive, it's never enough."

Robert Walla, who complained about a code enforcement issue, said that the city "needs to hold city officials who work for the mayor responsible."

"No, I won't vote for it," he said. "They waste more money."

Consumers in North Little Rock pay a total sales tax of 8.5 percent that includes the city's current 1 percent sales tax, a 6.5 percent state tax and a 1 percent Pulaski County tax.

North Little Rock's expenses have outpaced revenue growth over the past 10 years, Smith said. According to figures compiled by city staff, expenses have increased by 3.5 percent annually during that time, while the combined city and county sales-tax collections for North Little Rock have risen by 0.3 percent annually. The lack of revenue would lead to a shortfall in next year's city budget of about $5 million and the city's reserve fund being depleted by 2019, according to the city's projections.

The City Council in May opted for calling the special election instead of implementing a sanitation fee. North Little Rock doesn't charge residents for trash or yard waste pickup, a perk offered to voters to pass the current city sales tax in a March 2000 election. A sanitation fee, Smith said, wouldn't be equitable because apartment residents wouldn't be billed and residents living alone would pay the same fee as a large family that produces more trash.

If the tax increase fails, Smith said, the City Council might have to approve a sanitation fee, though it wouldn't produce the revenue city officials say is needed.

"All that is is a Band-Aid, at best," Smith said of a sanitation fee. "Doing nothing is not an option."

The North Little Rock Chamber of Commerce is leading the tax campaign and has created a website promoting the tax under NLRProud.com and a Facebook page under the same name.

There is also an opposition Facebook page called Stop the 2017 North Little Rock Sales Tax. Opposing voices on social media were credited with helping to defeat a proposed sales tax for North Little Rock in 2011.

Metro on 06/22/2017

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