Draft of new 1% ordinance sent to Fort Smith board

Fort Smith City Administrator Ray Gosack on Monday (July 18) sent a draft ordinance to the city Board of Directors that would repeal the 1% prepared food tax ordinance approved by the board in February and send the tax to a public vote.

The tax was approved by the board in February as a solution to an annual deficit with Fort Smith Convention Center operations predicted to occur when $1.8 million in annual state turnback money dried up. The state turnback program—which supported expansion or construction of tourism facilities — ended for Fort Smith in June 2010. The center has since operated on a reserve fund.

But after a contentious few months that included a petition drive to force the tax to an election and a court hearing that essentially overturned the city’s rejection of the petition drive, the board is moving toward an election on the issue.

During a July 12 board study session, only City Director Philip Merry Jr. appeared unwilling to consider moving the 1% tax to an election.

Gosack noted in Monday’s e-mail that the draft ordinance has three key provisions.
• The first provision repeals the prepared food tax ordinance adopted in February.
• The second provision of the draft ordinance below re-adopts the prepared food tax just as the board did in the February ordinance.
• The third provision refers the new ordinance and enactment of the prepared food tax to the voters.

Gosack said the board will need to decide an election date, with possible election dates in 2011 being Oct. 11, Nov. 8, and Dec. 13.

“The new ordinance retains the board’s future ability to review and lower the tax rate. The ordinance has been reviewed by the petition organizers’ attorney, and is acceptable to him,” Gosack wrote, referring to Brian Meadors, the attorney for the Citizens for Responsible Taxation.

According to Gosack, the draft ordinance may be discussed at Tuesday’s (July 19) regular board meeting, with the new ordinance placed for a board vote during the Aug. 2   regular meeting.

Eddie York, the de facto leader of the Citizens for Responsible Taxes, has said the group will pull their petition effort if the Fort Smith Board of Directors sets an election on a 1% prepared food tax. York said the ballot language must also be clear and not misleading.

If approved, the ballot would include the following language.
FOR the approval of a tax, as levied by Ordinance No. ___, of one percent (1%) of the gross receipts or gross proceeds received by restaurants, cafes, cafeterias, delicatessens, drive-in restaurants, carry-out restaurants, concession stands, convenience stores, or grocery store-restaurants from the sale of prepared food and beverages for on-premises or off-premises consumption for use for all lawful purposes.

AGAINST the approval of a tax, as levied by Ordinance No. ___, of one percent (1%) of the gross receipts or gross proceeds received by restaurants, cafes, cafeterias, delicatessens, drive-in restaurants, carry-out restaurants, concession stands, convenience stores, or grocery store-restaurants from the sale of prepared food and beverages for on-premises or off-premises consumption for use for all lawful purposes.