Mayors in Sebastian County tout need to continue countywide sales tax
Of the $33.768 million collected from the 1% county-wide sales tax in Sebastian County in 2022, 85.8% went to the towns and cities inside the county. A special election is set for Aug. 8 to extend the 1-cent countywide sales tax in Sebastian County for another 10 years.
This funding makes up a big percentage of the budget for many of the municipalities in the county and is heavily relied upon to fund things from fire and police protection to museums and senior centers.
The Sebastian County Quorum Court recently approved an ordinance to set a special election Aug. 8 for the question of the continuation of the levying of a county-wide 1% general sales and use tax within the county. The tax was first approved by voters in the county in 1994. It has been renewed twice for a 10-year interval, the last during a special election May 14, 2013.
In February of that year, the Quorum Court passed a resolution agreeing to call an election at the end of the 10-year period from the effective date of the sales and use tax in order to let voters consider the continuation of the tax. The tax is set to sunset June 30, 2024, Hotz said.
The Fort Smith portion of the countywide sales tax – which was 69.8% of the total collections in 2022 – provides $23 million per year into the general fund, which provides the majority of the funds for the fire and police departments, City Administrator Carl Geffken said, noting that the revenue is incredible important to running the city.
In 2022, Fort Smith collected $23.554 million from the tax. In the first three months of 2023, Fort Smith has collected $6.045 million, more revenue than budgeted, Geffken said. The revenue budgeted for 2023 is $23.841 million.
Greenwood Mayor Doug Kinslow said the funding Greenwood receives from the tax is “hugely important.”
“Without it, we would not be able to provide services to the citizens that they have come to enjoy,” he said.
Greenwood received approximately $2.5 million from the tax in 2022, which was 7.4% of the collections. The tax revenue is distributed among the 11 municipalities in the county based on population. The county also receives a portion (14.2% in 2022) based on the population who live in the county, County Judge Steve Hotz said. The tax makes up about 10% of the county’s funds, Hotz said.
In Lavaca, the sales tax revenue is more than 58% of the city’s general fund budget. In 2022, Lavaca received $642,358 (1.9% of the revenue generated from the tax), said Susan Hayden, the city’s finance director.
“The Sebastian County Sales Tax revenue is very important to the City of Lavaca,” she said. “This revenue allows the City of Lavaca to provide better than adequate police and fire protection, maintain three city parks and numerous city buildings, purchase vehicles and equipment for emergency services, provide supplemental support to the local museum, library, Senior Center and Christmas parade. We also use a portion of the sales tax revenue to finance debt service on the Police Station constructed a few years ago and a portion is set aside each year towards the purchase of a new fire truck.”
In 2022, funds from the tax were used to purchase “Jaws of Life” extrication equipment, she said.
Barling receives about 3.7% of the tax revenue each year. The city received $1.254 million from the tax last year, which is about 43% of the city’s general fund revenue. In 2022, the city had a general fund revenue of $2.889 million, said Mayor Greg Murray. All the funds are directed to the city’s general fund, going to fire, police and parks, he said, noting that if the city did not receive revenue from the tax, there would have to be serious cuts in all three departments.
“I want to see my city grow and I know others in our county want to grow as well. If we do not have the continuation of this tax passed we are going to take a huge step backwards and there will be some major implications,” Murray said.
The remainder of the tax is split among Bonanza (0.5%), Central City (0.4%), Hackett (0.6%), Hartford (0.4%), Mansfield (0.5%) and Midland (0.2%).
“I know it is said all the time, but it is important: This is not a new tax. This is something we already have,” Kinslow said. “It provides a lot of services for our citizens that we don’t want to lose.”
He said it would be very difficult for Greenwood to make up the revenue from the tax in other ways, a sentiment that is carried by administrations throughout the county.
“I wish we had some more revenue streams to benefit from coming into our communities,” Murray said.
The Sebastian County Quorum Court passed a resolution April 18, stating how funds from the tax will be spent if the renewal is approved by the voters. The county’s share of the sales tax will be split with 54.5% of the revenue going to the operation of the Sebastian County Adult Detention Center, 9% going to the operation of the Sebastian County Juvenile Detention Center, 9% going to the continued funding and support of three patrol deputies with the Sebastian County Sheriff’s Office, 11% going to capital projects, 5% going to the county’s volunteer rural fire departments, 2% going to the Sebastian County EMS, 1% going to the Sebastian County senior citizen centers, 0.5% going to the programs with the Scott-Sebastian County Public Library, including building expansion as necessary, 7% going to the costs associated with paying for county employee health care and worker’s compensation, and 1% going to county parks.
“This funding is critical. Without it, something will have to go, something will have to be eliminated,” Hotz said. “When you take 10% out of your budget, that is significant. We haven’t looked at what we would need to cut, but if we didn’t have it, we’d have to make cuts.”
Murray had one suggestion that could help all towns in the county outside of Fort Smith.
“One stream which would help would be to be able to allow the sale of alcohol. Most people don’t understand that Sebastian county is dry with the exception of Fort Smith,” Murray said. “I know we are a split county, but this should be a city by city basis in a split county such as ours.”
That is not the case however, Murray said, as Barling is tied to the rest of the county and there would have to be a county-wide vote to allow the sale of alcohol.
“If it were to pass, all cities would share that tax revenue. Now each city could have city-wide voting on whether to allow or not allow alcohol. Those towns that vote not to allow alcohol would still get a share of the alcohol revenue because the county voted yes. This is a win-win for those towns. Also, this would open up restaurants and stores to sell items and not have restrictions to become private clubs to do so,” Murray said.