1% food tax debated at LFS Alumni forum

story by Luke Hobbs
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In a Thursday (Oct. 13) forum, opponents of the 1% prepared food tax called for more accountability and efficiency in their city government, while city officials maintained that the tax is a vital part of Fort Smith’s future.

The forum was the second of four events providing a public hearing on the proposed tax, which would provide operating revenue for the Fort Smith Convention Center. The event was held at the Riverfront Pavilion in downtown Fort Smith and was hosted by the Leadership Fort Smith Alumni Association.

Speaking for the prepared food tax were Fort Smith Mayor Sandy Sanders and City Administrator Ray Gosack. Speaking against the tax were former State Rep. Frank Glidewell and local activist Liz Armstrong. Cheryl Anderson, a local mediator and attorney, moderated the debate. About 50 people attended.

TRUST ISSUES
Armstrong began the forum by calling for the city to regain the people’s trust. She said the people had lost trust in their local government when city directors enacted the prepared food tax by ordinance earlier this year. The ordinance had not gone into effect when, after an intense petition drive and court battle against the tax, directors reversed themselves and set up a Nov. 8 election to let the people decide whether to enact the tax.

Glidewell agreed with Armstrong, adding, “It’s hard to trust when we’re not trusted as citizens.”

He argued that the government could not keep taxing its citizens and pointed to the state of Arkansas lowering the sales tax on groceries by a quarter-cent earlier this year.

“And we want to raise it (on prepared food) by one cent?” he asked.

BUDGET CUT OPTION
Gosack opened the case for the tax by saying, “You’ll hear speculation and innuendo about what we’re planning to do. We want to give you the plan.”

He said the city estimates that the convention center generates about $20 million annually from out-of-town visitors. He called the convention center an important part of Fort Smith’s quality of place and said the food tax was the best option for supporting the center. If the tax doesn’t pass, he said, the convention center’s minimum operating expenses of $800,000 annually will have to come from the city’s general fund, which will force cuts in public services.

When the two sides were asked to explain the prepared food tax from their own perspectives, Armstrong said her perspective was that of a choice. She said the citizens of Fort Smith could choose not to enact a tax that can be raised to three percent or reapportioned to different areas, without voter approval in either case.

Sanders responded that back in 2009, the Fort Smith Advertising and Promotion (A&P) Commission, which would take over the convention center if the tax passes, said it would dedicate 100% of prepared food tax revenues to the convention center. He said the Board of Directors is considering passing a resolution to the same effect in next week’s regular meeting.

COST PER PERSON DEBATE
The “For” and “Against” sides appeared to disagree over how much the prepared food tax would cost the people of Fort Smith, but it turned out that their estimates were almost exactly the same.

Early in the forum, Armstrong questioned the city’s estimate that the tax would generate $1.8 million a year for the convention center. “That’s $180 million in restaurant revenue,” she said. The city says that about half of restaurant spending comes from people who live in Fort Smith, with the other half coming from tourists and residents of neighboring towns. Armstrong said this estimate meant that about $900,000 of the tax revenue would be paid by Fort Smith residents. Estimating a city population of 90,000, she said, the tax would require citizens to spend an average of $1,000 a year on prepared food.
 
Gosack, meanwhile, held up a dollar bill at one point in the forum and told the audience the tax would cost Fort Smith residents less than a dollar per month.

Armstrong responded a few minutes later, “I’d be happy to give $12 a year for the convention center, but I don’t see where that number comes from.”

Gosack and Armstrong, however, were talking about different aspects of the same numbers. Both sides eventually agreed that the city’s estimates have residents spending about $1,000 a year on prepared food, which would mean the tax would cost people an extra $10 per year.

GLIDEWELL ERROR
Just before the debate ended, Glidewell said the people of Fort Smith had voted down a sales tax for the Fort Smith Civic Center (now the Convention Center) at least once, perhaps twice, in the mid-1990s. Glidewell added that in that one of those elections, the city had employed trickery by phrasing the ballot question so that voters would have to vote “Yes” in order to vote against the tax.

“And it still got voted down, by a small margin,” he said.

That was part of the last answer to the last question in the forum. Gosack began to respond to what Glidewell had said, saying that he felt Glidewell had misled and confused voters with this statement and other statements. But since both sides had already responded to the final question, Anderson interrupted Gosack and declared the forum over.

Gosack said after the forum that Glidewell had confused separate elections from the 1990s. The one time that a sales tax relating to the convention/civic center appeared on the ballot, Gosack said, Fort Smith voters approved it. (That election took place in 1997, according to The City Wire’s recent story on local sales tax elections.) Gosack said Glidewell mixed that election up with a referendum on the 1% countywide sales tax, also during the mid-1990s, in which voters had to vote for the measure in order to have the tax repealed. The measure failed.

Glidewell admitted after the forum that he wasn’t sure whether the election he had described had involved the civic center. He said he was relying on his memory of the election, not any specific record of it, and that he could be remembering it incorrectly.