Do the 1%. Now.

The Fort Smith Board of Directors should by ordinance enact a 1% prepared food tax to support the operations and maintenance of the Fort Smith Convention Center. It is part of a reasonable, common and efficient method used to fund tourism recruitment and convention center operations in cities that effectively compete for business travel and tourism dollars.

To address why the board should soon move to enact the tax, let’s address a few arguments opposing board implementation of the tax.

Before continuing, please know this essay is not intended to persuade or provoke persons who are so against an increased tax or city expenditure that any discussion of the merits are pointless; persons who point to past failings of city government to oppose any attempt to rectify the problem resulting from a past failing; and, persons who never supported the idea of the city operating a convention center and never will.

This essay is instead meant to provide perspective as part of an unemotional consideration of the issue. The essay does seek — possibly naively so — to encourage the Fort Smith board to soon end a more than 10-year neglect of fiduciary duty with respect to adequately funding the center.

• Argument against the tax: There are plenty of places in a $220 million city budget to find the money instead of issuing a tax.

Untrue. Not only would seeking cuts in a $220-plus million city budget reflect only a one-time fix, but obligated funds represent a great majority of the city budget. Moving bond proceeds (obligated funds) to other areas would find the city in legal jeopardy. Also, the most valid criticism of the city’s management of the convention center is that part of the center’s revenue was moved around to support other city projects. It now seems odd that those who criticize that action now suggest more of the same to fix this problem.

What’s more, an ad hoc committee comprised of private-sector business leaders reviewed in detail the numerous funding and management options for the convention center. They recommended the 1% prepared food tax.

• Argument against the tax: Only voters should approve the tax.

There is no precedent mandating voter approval, and seeking voter approval would result in an unnecessary loss of at least $350,000 in taxpayer dollars. Of the 28 cities with a 1% prepared food tax, 22 were enacted by ordinance. Also, the increase to the 3% hotel tax now used to fund the Fort Smith Advertising and Promotion Commission was enacted by board ordinance.

Without a funding mechanism, convention center operations now burn through about $104,500 in reserve funds each month. By the end of 2011, the fund total is estimated at $359,000.

Therefore, the ordinance process, which will take 3-4 months to begin collecting tax revenue, will reduce the fund by between $313,500 and $418,000. The election process will take 6-7 months, and, if voters approve, would drain the fund of between $627,000 and $731,500 — not including about $25,000 to pay for the election.

What’s more, an ad hoc committee comprised of private-sector business leaders reviewed in detail the numerous funding and management options for the convention center. They recommended the 1% prepared food tax.

• Argument against the tax: The success of the Phoenix Expo Center and the privately held convention centers in Rogers and Springdale are proof the convention center should not be supported with tax dollars.

We don’t yet know if the infant Phoenix Expo Center will be a success. The “convention centers” in Rogers and Springdale are part of hotel operations in which the space is used to drive food, beverage and hotel room sales. This is, at best, a specious argument that attempts to obfuscate with an apples and oranges comparison.

What’s more, an ad hoc committee comprised of private-sector business leaders reviewed in detail the numerous funding and management options for the convention center. They recommended the 1% prepared food tax.

• Argument against the tax: The failure of the convention center to make money proves the city shouldn’t be in the convention center business.

The convention center was never intended to make money. When the convention center was built and initially maintained with state tourism turnback funds, city and chamber officials knew another revenue source would be needed when the 10-year turnback program ended. But the city board failed in that 10-year stretch to responsibly address the funding issue.

However, it’s true the city shouldn’t be in the convention center business. Which is why enacting the tax and pulling the operations into the Fort Smith A&P Commission — which is how it is done in a great majority of cities — makes sense. Also, moving the convention center under the A&P with the tax ensures convention center funds are not used by the city for non-tourism purposes. For those who seek to get the city board out of the convention center business, the tax is the ticket.

What’s more, an ad hoc committee comprised of private-sector business leaders reviewed in detail the numerous funding and management options for the convention center. They recommended the 1% prepared food tax.

• Argument against the tax: Convention centers don’t do anything for the economy.

This is possibly the most bogus argument of all. In 2010, a minimum of 40,000 people — more likely above 50,000 — visited Fort Smith to attend an event based around the convention center. Most economic impact models would have us multiply 40,000 by $200 (estimated per day spending) and then apply a rollover factor of between 2 and 4 to determine the economic impact. To avoid inflating the impact, let’s multiply the 40,000 visitors by $150, which shows a direct economic impact of $6 million. As a community, we must decide if a tax that raises $1.8 million — with an estimated 40% paid by non-Fort Smithians — is a good way to capture $6 million. Said another way, if you were asked to pay $1.80 to receive $6, would you do it? Only a hardcore libertarian would argue that a positive economic benefit never justifies taxpayer subsidization.

Also, a rigorous economic impact fails to capture the quality-of-place benefit the modern convention center and performing arts center provides for the Fort Smith Symphony, University of Arkansas at Fort Smith and many other area groups and non-profits.

What’s more, an ad hoc committee comprised of private-sector business leaders reviewed in detail the numerous funding and management options for the convention center. They recommended the 1% prepared food tax.

• Argument against the tax: A prepared food tax will do harm to the restaurant industry.

This argument requires us to believe people will boycott restaurants because a $50 meal will cost an extra 50 cents with a 1% prepared food tax. Of the 28 Arkansas cities with a prepared food tax, research failed to show a collapse of or struggle within the restaurant sector as a result of a prepared food tax. Regional cities with the 1% prepared food tax are Alma, Clarksville Greenwood, Mena, Ozark and Van Buren.

What’s more, an ad hoc committee comprised of private-sector business leaders reviewed in detail the numerous funding and management options for the convention center. They recommended the 1% prepared food tax.

The bottom line is that a prepared food tax — along with a hotel tax — is a common method of tourism industry support around the state and country. Which is to say the economics of using a facility or fund to recruit business and tourist travelers to a city or region are proven, with typically the only conflict being the extent to which tourism and business travel dollars positively impact a city or region.

Further delay by the Fort Smith board to enact the tax by ordinance will result in the unnecessary loss of hundreds of thousands of dollars. This relatively new board has the choice between the same fiduciary negligence of the past 10 years or to engage a commonly used tourism tax and proven management structure.

What’s more, an ad hoc committee comprised of private-sector business leaders reviewed in detail the numerous funding and management options for the convention center. They recommended the 1% prepared food tax.