Election likely on Fort Smith prepared food tax

A vote on a 1% prepared food tax to support the Fort Smith Convention Center appears headed to a municipal election that could be held as early as April 12.

During Tuesday’s (Feb. 8) study session of the Fort Smith Board of Directors, City Directors George Catsavis, Don Hutchings, Kevin Settle and Steve Tyler said the 1% option should go to the voters. City Directors Andre Good and Pam Weber said the 1% should be enacted by a board ordinance. City Director Philip Merry Jr. was not at the Tuesday, but e-mailed his reasons for supporting board enactment of the tax.

“I do not like taxes anymore than others do. I work hard just like we all do for the income we bring in. I promise to you that I have studied this from every conceivable angle and have done so for months and months,” Merry noted. “The time is now and to delay is so costly to the voters in that some $118,000 per month is exhausted for every month we do not address this situation. I hate to see such dollars evaporate. Such good can come from this investment for our city , our people, and  for those who come to visit our city.”

The Fort Smith board spent most of 2008, 2009 and 2010 seeking a solution to plug the annual deficit. A state turnback program ended in June 2010 from which the city received about $1.8 million a year. In 2010, the city received only $888,723. A fund balance will allow the city to cover the convention center shortfall for most of 2011.

An ad hoc convention center committee formed by the city board met several times in Spring 2010 and reviewed many funding options, including a 1% hospitality tax, finding cuts in the city’s roughly $40 million operating budget, reallocating a portion of the city’s 1% street tax, re-instituting a business license fee and finding a 3rd party operator. That group eventually endorsed a 1% prepared food tax.

Prior to the straw vote of the board, Fort Smith Mayor Sandy Sanders made a pitch to the board requesting their support for board enactment of the vote. He read a list of 22 Arkansas cities in which the tax was enacted by board vote, and reminded the board that Fort Smith’s 3% hotel tax was approved solely by the board. Sanders also noted that the Town Branch neighborhood group endorsed the tax, with Sanders adding that they group represents “some of the least-affluent” in the city.

“I believe deep down that each board members knows the 1%” is the right answer, Sanders said in his closing.

But it was not enough to sway a majority. Hutchings said he hears primarily from constituents who support the 1%, but say it should be voted on by the people. Tyler said people in his ward also want a public vote.

“They want to weigh in on this. … They want to have a say on if they are to have a tax on prepared foods,” Tyler said.

Not willing to concede the issue, Good asked “for another stab” at urging consideration for the board to enact the tax. He said Fort Smith is growing, and the city’s general fund is needed to support new fire stations and firefighters. Funding for those basic services will be tough to find if voters reject the 1% and the convention center shortfall has to come from the general fund.

Good also chided the board, saying it has discussed the issue for years now, and now has again decided to pass the responsibility of decision making to an election that will cost the city $25,000 or more.

“How many opportunities are we going to let slip by us because we don’t want to make a decision?” Good said in his challenge. “I don’t want to do that anymore.”

However, a second straw vote produced the same result. It was agreed that the board would consider during its Feb. 15 regular meeting an ordinance placing the item on a ballot.

According to Fort Smith City Clerk Sherri Gard, state law requires special elections to be held only on the second Tuesday of a month. Also, an election may be held no less than 50 days after an ordinance calling for the election is filed with the County Clerk. Therefore, if the Fort Smith board approves such an ordinance at its Feb. 15 meeting, an election could be scheduled for April 12. Other possible dates in the near future are May 10 and June 14.