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Little Rock voters balk on Scott's pitch for sales-tax increase

by Joseph Flaherty | September 15, 2021 at 7:24 a.m.
FILE - Downtown Little Rock skyline in 2018

Little Rock voters rejected a 1 percentage-point sales-tax increase, championed by Mayor Frank Scott Jr., by a wide margin during a special election Tuesday, scuttling the wide-ranging plan to invest in quality-of-life initiatives as the city emerges from the covid-19 pandemic.

With all precincts reporting, unofficial results were:

Against 13,025

For 7,987

According to the Pulaski County Election Commission, Little Rock saw roughly 17.5% turnout from its pool of approximately 120,000 registered voters.

Officials had estimated the tax increase would generate $530 million in new revenue for the city over the next decade before a Dec. 31, 2031, sunset date.

A separate city sales tax of three-eighths percent that was originally approved in 2011 in order to fund capital improvements will expire at the end of this year, meaning the net increase to the city's rate would have been five-eighths percent starting in January if voters had authorized the tax increase.

The overall sales-tax rate in Little Rock would have risen to 9.625% in 2022 when accounting for state and county sales taxes.

The failure of the proposed tax increase in Tuesday's referendum means the overall sales-tax rate in Little Rock is on track to drop to 8.625% starting next year, absent a last-ditch effort to extend the capital-improvement tax.

The result deals a blow to Scott's quest for a tax increase that would bet on quality of life as a crucial component of the city's growth and would funnel money to parks, the Little Rock Zoo, infrastructure, economic development and early-childhood education.

"While this election did not turn out as we'd hoped, I'm grateful for the members of the City Board who placed this proposal before the voters and the people of Little Rock who campaigned with me for a stronger, more vibrant city," Scott said in a statement Tuesday night. "Your commitment and sacrifice to help Rebuild The Rock is to be applauded. I'm deeply appreciative of each of you and look forward to a day when many of the proposals that were part of Rebuild The Rock come to fruition."

In his statement, the mayor signaled he would work closely with the city board and residents to "make the necessary adjustments" for the expiring capital-improvement tax.

He also seemed to acknowledge that the pandemic may have dragged down the number of "yes" votes on the tax package.

"We always knew this would be a difficult journey -- the pandemic has caused a great deal of uncertainty about the future," Scott said.

Scott had floated an increase in the city's sales-tax rate in 2020 but abandoned the effort because of the onset of the pandemic. The mayor renewed his call for a sales-tax increase during his March 25 State of the City virtual broadcast and dubbed the proposal "Rebuild the Rock."

What followed was an extended period of debate as members of the Little Rock Board of Directors evaluated Scott's proposal and weighed whether to call the special election.

Their initial response was chilly. Scott had wanted city directors to call a July election, but it soon became clear the elected officials were not ready to move with such speed on the tax package.

Some of the items in the proposal were altered in a resolution that sketched out planned spending. The categories of public safety and infrastructure received a boost. And, in a significant concession, the tax proposal was ultimately revised to include the 2031 sunset date in spite of the fact that Scott had originally argued for a tax increase that would last in perpetuity.

City directors opted to call the special election in a 6-3 vote June 15, with one member voting "present."

Later, on June 29, the board approved the separate measure on how officials planned to use the increased tax revenue. The resolution -- though nonbinding with regard to the individual spending items, which would have had to go back before the board for approval -- said the city intended to spend the money on an array of initiatives and construction projects sought by Scott.

They included an indoor sports complex, new exhibits at the Little Rock Zoo, vehicle replacement at the police and fire departments, street resurfacing and more.

The single largest category under the 10-year spending plan approved by the board was parks and recreation, golf and fitness, with $177.25 million, followed by infrastructure with $76.75 million and public safety with $73.75 million.

Scott's allies who made the case for the tax increase at different junctures this spring and summer included Sen. Joyce Elliott, D-Little Rock; the city's chief education officer, Jay Barth; and Susan Altrui, director of the Little Rock Zoo.

The board of the Little Rock Regional Chamber of Commerce eventually endorsed the mayor's tax proposal in August after some earlier reservations expressed by the group's chairman, John Burgess. In a statement to the mayor in late April, Burgess had questioned the absence of a sunset date for capital expenditures in the initial version of the tax package, among other things.

Opposition to the proposed tax package came from different quarters.

Vice Mayor Lance Hines, the Ward 5 representative on the city board, helped lead an opposition ballot committee called "Responsible Taxation for Little Rock." In the run-up to the board's decision to call the election, Hines spoke out against elements of the sales-tax proposal and criticized the way the package was crafted in comparison to the 2011 tax increase.

Additionally, a ballot committee affiliated with the group Arkansas Community Organizations distributed door hangers advocating a "no" vote on the tax increase. Organizers cited the timing of the proposed tax increase amid the pandemic and its potential burden on lower-income people, who pay a larger portion of their income in sales taxes on everyday purchases.

Little Rock resident Gary Jones, 75, said he was probably going to vote against the tax increase as he walked into his polling place at the Historic Arkansas Museum on Tuesday afternoon. He described the tax as regressive.

"I'm sympathetic to a lot of progressive notions, but this seems a little force-fed, a little undefined, possibly subject to political abuse," Jones said. "So [I'll] wait until something comes along that's a little more to my sensibilities, I guess."

Print Headline: Voters in LR turn away bid for sales-tax increase

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