FORT SMITH -- The University of Arkansas at Fort Smith is reevaluating after voters rejected extending a 0.25% Sebastian County sales tax during a special election Tuesday.
UAFS Chancellor Terisa Riley said Wednesday that university officials were disappointed about the outcome of the election, but also understood it.
The tax has been a source of revenue for the school since it was approved by voters in 2001 and took effect Jan. 1, 2002. It is due to end on Jan. 1, 2022. The proposed extension would have made it last for an additional 10 years.
"I think, on behalf of the university community, it will certainly mean that we have to make some changes to operations and offerings here on campus," Riley said.
With all 117 precincts reporting, according to the secretary of state's office website, unofficial returns for the special election were:
Riley said on Sept. 21 that UAFS takes in about $6 million on average per year from the sales tax, which makes up about 8% of the school's annual budget.
On Wednesday, Riley said the university will have to make decisions about how to either grow its income or cut its expenses to live within the funds it is receiving.
"And I think the discouraging piece for many people is assuming that that means huge increases to our student tuition and fees, which is absolutely not within the mission of this place," Riley said.
"We still hope and plan to be an affordable institution that provides four-year degree offerings. We may not be able to provide as many options and opportunities based on any of the cuts that we need to make, but that remains as part of our discussion as an institution."
Arkansas Act 1087 of 2013 gave UAFS the authority to request a sales-tax extension. the Sebastian County Quorum Court approved an ordinance calling the special election on May 26. It states that before the sales tax, between 1965 and 2001, county voters supported UAFS, and its predecessor Westark College, through property taxes.
Rachel Putman, associate director for strategic communications at UAFS, previously said the university would be able to ask the Sebastian County Quorum Court for a special election to be scheduled between now and September as long as it followed all required deadlines. The extension must be approved by voters at least 90 days before Jan. 1, 2022. Votes must take place and be finalized no later than September.
Furthermore, Putman said any cost associated with a special election if the ballot question were not added to a primary or general election already planned by the county would be the university's responsibility.
Riley said the university is trying to take what it has learned from this election and really listen to the taxpayers as to what they want from it.
"I think we need to take some time to assess the vote in this particular case to make a determination about going forward with a special election in 2021," Riley said.
Despite the support the proposal received from individuals and groups such as the Friends of UAFS, others, including the Citizens Against Unfair Taxes, opposed it.
Fort Smith attorney Joey McCutchen, chairman of the Citizens Against Unfair Taxes, said the group was pleased with the results of the election.
McCutchen said taxpayers "are sick and tired" of paying high rates, "and I think that came through loud and clear" in the election results.
"I think also that this tax is unfair in the sense that UA-Fayetteville, UAPB [University of Arkansas at Pine Bluff], UALR [University of Arkansas at Little Rock] are all funded with state dollars and don't have local sales tax. The people of Fort Smith have been more than generous over the last 19 years with their tax dollars. We've built a first-rate university. This tax was never intended to be permanent, which, in effect, it would be had this tax have passed, and it's time to move on."
The 0.25% tax is part of the 1.25% Sebastian County sales tax, which is included in Fort Smith's current tax rate, according to the city's finance department. The total rate is 9.75% when the 6.5% Arkansas and 2% city sales taxes are taken into account.
Fort Smith residents had also seen multiple tax and fee increases in the time leading up to the special election. In 2015, city officials signed a consent decree with the U.S. Environmental Protection Agency, the Department of Justice and the state, with the city agreeing to make an estimated $480 million in repairs and upgrades to its wastewater system over the course of 12 years to clear up chronic violations of the federal Clean Water Act. It raised its sewer rates by 167% from 2015-17 to aid in fulfilling these requirements.
In May 2018, Fort Smith and Barling residents approved a millage increase to fund projects in the Fort Smith School District. The increase, which moved the school district property tax rate by 5.558 mills from 36.5 to 42.058, will generate about $120 million. It was the first millage increase in Fort Smith since 1987.
The city Board of Directors also approved an ordinance on Aug. 18 establishing regulations and charges for the sanitary landfill and residential, commercial and industrial sanitation services, as well as related services. This included rate increases for residential and commercial sanitation services over the next two years starting in October.
McCutchen said the Citizens Against Unfair Taxes would "vigorously" oppose a possible special election on an extension of the sales tax in 2021.
"We think the will of the people has been spoken very convincingly," McCutchen said. "It's time to move on."