Fort Smith voters reject 1% prepared food tax (Updated with final tally)

Editor’s note: This story now reflects the final vote tally.

Fort Smith voters have overwhelmingly rejected by a wide margin the use of a 1% prepared food tax to help support the marketing and operations of the Fort Smith Convention Center.

With 100% of precincts reporting, 62.7% of voters (5,619) were against the tax. Of the 64,165 eligible voters, only 10,245, or 15.97%, voted.

The vote caps about three years of study on how best to fund the center that was expanded in the late 1990s. A 1% prepared food tax is estimated to raise about $1.8 million annually.

Without the tax, the city has said it will have to fund convention center operations from the about $42 million general fund budget. Police, parks and other services would be cut under a plan B funding report released Aug. 29 by Fort Smith City Administrator Ray Gosack. The proposal included a $317,900 cut to the Fort Smith Police Department and $202,600 in the city’s Parks Department to help find about $800,000 to keep the open the convention center without the 1% prepared food tax proceeds.

EARLY LANDSLIDE
Early results didn’t bode well for passage of the tax.

Of the 2,224 early votes cast (early voters and absentee ballots), 59.35% (1,273) were against the tax and 40.65% (872) were for the tax. The early voting totals were posted just a few minutes after the polls closed at 7:30 p.m.

The voting tallies turned worse for the tax proponents. At 8:34 p.m., the vote was 63.07% (1,990) against and 36.93% (1,165) for the tax. The Sebastian County website reported that the vote tally represented 7.69% of the precincts had reported.

With a little more than 20% of the precincts reporting, the margin remained wide, with 63.05% against and 36.95% for the tax.

OPPOSITION RESPONSE
“We the people won,” said local apartment owner Bob Newbold, who helped lead the effort to fight the tax. “You know how much money the other side spent. They had all the heavy hitters — the Chamber, the Fair Board, the mayor, (the late ex-Mayor Ray Baker’s) wife. This was a victory for the little people of the city.”

Former Arkansas Sen. Frank Glidewell, another vocal opponent of the tax, agreed.

“There weren’t any losers because everybody got their right to vote,” he said.

Newbold added that he respects those who supported the tax and hopes both sides will come together for the future.

“I think some good things have come of all this,” he said. “The quarterly ward meetings will be a very good thing. I like the Forward Fort Smith people; I think they’ll do some good things for our city.”

Glidewell wasn’t as optimistic about how the city directors and staff will react.

“I hope the Board of Directors will listen to the citizens and maybe not to the downtown property owners,” he said. ”But I’m not going to be too harsh on them. … And when you look at this 2012 budget — we’ve got some things coming up that will need to be paid for: a new fire station, new fire equipment, a new water line from Lake Fort Smith. How are we going to pay for all this? More taxes?”

MAYORAL RESPONSE
Fort Smith Mayor Sandy Sanders (interviewed when about 21% of precincts had reported) said he was surprised and disappointed with the results.

“I’m disappointed. I think the support was the right thing to do,” Sanders told The City Wire. “Now the board will begin Thursday night to go through the budget process and determine those services that will need to be reduced to continue to support the convention center.”

The Fort Smith Board of Directors begins at 6 p.m., Thursday night (Nov. 10) its review of the 2012 proposed budget. The meeting will be held at in the Community Room of the Fort Smith Police Department. A second meeting will be held Nov. 17, at the same time and the same location.

Sanders said with the loss of manufacturing jobs it is “even more important to retain the tourism jobs, the tourism economy we have. We have a heck of an investment there (convention center), and we need to maintain that.”

Why was the tax so overwhelmingly defeated?

Sanders cited three reasons: the overall anti-government mood throughout the country, “the very intense” misinformation campaign pushed by those opposed to the tax, and the news about Whirlpool.

“The Whirlpool announcement certainly did not help,” Sanders said.

However, Sanders said a good thing to come from the effort was the formation of Forward Fort Smith, the group that ran the public campaign seeking voter approval of the 1% tax.

“One of the real positives that has come out of this is the Forward Fort Smith group, which is basically a collection of younger folks who I think have the best interests of Fort Smith at heart,” Sanders said.

Jeff Smith, one of the Forward Fort Smith leaders, said he respected the citizens’ vote on the 1% tax. But he did say the Forward Fort Smith group was not formed for just one issue.

“At this point, the voters have spoken, and in a sense, I feel like we lost Fort Smith’s first battle for it’s future, but we’re going to continue fighting until we win the war,” Smith said. “We really are going to push for what’s good for Fort Smith. We’re going to push for that whether it’s the popular thing or not.”

TAX HISTORY
A 1% prepared food tax was originally enacted 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 board changed direction on the tax after months of public uproar, which 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. In a July 28 special meeting, the board unanimously voted to repeal the original food tax ordinance, re-enact the tax, and send the measure to voters in a Nov. 8 special election.

Fort Smith board members have said the tax, if approved Nov. 8, would be brought before voters again in five years to give them a chance to approve of how the effort is being managed.

DIRECTOR PUSH, PLAN OUTLINE
Five Fort Smith City Directors — Directors Andre Good, Don Hutchings, Philip Merry Jr., Steve Tyler and Pam Webber — actively campaigned for passage of the 1% prepared food tax. City Director George Catsavis has consistently opposed the tax, and City Director Kevin Settle would never directly answer if he would seek voter approval or rejection of the tax. He would only say he planned to educate citizens about the issue.

The Fort Smith A&P released a plan Sept. 12 that outlined how the tax proceeds would be used. In addition to supporting convention center operations, A&P officials say the estimated $1.8 million in proceeds from the 1% prepared food tax would be used to improve parking, beef up a capital/repair budget, subsidized lower rates for local groups, recruit and/or offer more events, and engage a new marketing and ticketing system.