Fort Smith Board ready to send 1% issue to voters

story by Luke Hobbs
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In its next regular meeting, the Fort Smith Board of Directors plans to vote on an ordinance setting up a November voter referendum on a 1% prepared food tax.

The board reached an informal consensus on the plan in Tuesday’s (July 19) regular meeting, but only after disagreement on whether the new ordinance should include the board’s stamp of approval for the food tax.

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.

The last few months have 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 furor over the tax led Director Pam Weber to propose, in last week’s (July 12) study session, that the board send the tax to the people for approval.

On Tuesday, City Attorney Jerry Canfield told directors that the legal staff has prepared a proposed text for the new ordinance, which has three major parts:
• Repealing the original 1% prepared food tax ordinance;
• Re-adopting the 1% prepared food tax; and
• Submitting the measure to the people in a referendum, which would take place on a yet-to-be-determined date in November.

Canfield said because the new ordinance will both re-adopt the tax and forward it to the people for approval, it will require a two-thirds majority (five votes) to pass.

Canfield also said he has spoken with Brian Meadors, attorney for the Citizens for Responsible Taxation (CRT), who engineered the petition drive against the food tax, and Meadors told him the group will withdraw its petition if the board enacts the new ordinance.

Director Kevin Settle asked Canfield why the board had to re-adopt the food tax as part of submitting it to the people. Could the board not simply repeal the original ordinance and then propose the food tax, without giving it a stamp of approval, he asked.

Canfield said the board could do that if it wished. Such an ordinance, he said, would only require four votes to pass, instead of five.

Settle said he would favor this alternate ordinance.

“Let’s just repeal [the food tax] and then send it to the voters,” he said.

Director Steve Tyler disagreed, saying it was critical that the board approve the food tax as part of the new ordinance.

“The difference [between the proposed ordinance and Settle’s alternative],” he said, “is that the board weighs in publicly.”

Moments later, Mayor Sandy Sanders announced that the proposed ordinance — not Settle’s alternative — would appear on the agenda for the August 2 regular meeting.

It was unclear whether the other directors supported this plan, since Settle and Tyler were the only two directors to speak for or against the ordinance.

But City Administrator Ray Gosack said after the meeting that Sanders’ announcement reflected the board’s consensus on the issue.

Settle was one of three directors to vote against the food tax in February, joined by Directors Don Hutchings and George Catsavis. In order for the new ordinance to pass, at least one of them will have to vote to approve the food tax as part of sending it to the people.