Fort Smith sales tax plan resolution may not be enough to quell opposition

Despite a proposed resolution from the Fort Smith Board of Directors to revisit sales tax allocations for police funding and the street tax program, a group opposing the tax may continue to lobby residents to vote against the more than $640 million plan.

The Fort Smith Board of Directors on Feb. 21 approved the following tax package for the May 13 ballot:
• Reauthorizing a 0.75% sales tax first approved by voters in 2022 to pay for consent decree work and to pay bonds, with 0.125% used for the Fort Smith Police Department, and
• Renewing the 1% street tax but reallocating 0.625% for streets, bridges and drainage work, with the remainder of the tax to fund consent decree work and bonds.

The May 13 ballot also will include a third question asking residents to vote for or against issuing the bonds. If the measures pass, the city will issue bonds to fund up to $360 million in capital improvement projects. Debt would be payable over 30 years, though that time could be reduced if sales tax revenue grows, according to the city. If approved by voters, taxes would be in place until 2059. All three measures on the ballot must pass for the city to issue the proposed $385 million in bonds, which would fund up to $360 million in sewer capital improvement projects.

After decades of failing to maintain water and sewer infrastructure to federal standards, the city entered into a consent decree with the U.S. Environmental Protection Agency (EPA) and U.S. Department of Justice (DOJ) in late 2014. The consent decree, which began in January 2015, required the city to make an estimated $480 million worth of sewer upgrades in 12 years. That amount is now estimated to be as high as $800 million.

Fort Smith attorney Joey McCutchen held a press conference Tuesday (April 29) to announce that the Citizens Against Unfair Taxation, a group formed to oppose previous city and county tax proposals, will oppose the sales tax plan.

McCutchen said the group “wants the problem fixed,” and supported the city’s 2022 sales tax plan, but believes voters are “being duped” into voting for taxes that will be on the books for at least 30 years.

“The fundamental problem we have is that it’s a 34-year tax. And, taking it one step further, it is not only money that is going for sewer, but they have combined this with the police and they’ve combined the 1% street tax and part of that is now going to sewer. So we have a problem with joining these taxes together. We think it is going to be no more than a slush fund for the police.”

When asked if the group had a solution to the federally-mandated consent decree, McCutchen said one solution is that the “city should hire professionals” with consent decree experience to develop a solution. Krystal Cadelli, a member of the group, said the city hasn’t done enough to pursue low-interest federal government loans or seek relief from the EPA and Arkansas Gov. Sarah Sanders.

McCutchen said the group plans to seek voter opposition to the tax vote through word of mouth and billboards.

During a Tuesday study session, City Director Kevin Settle moved to place a resolution on the board’s next regular meeting agenda that would call for an election in 2030 on the part of the 1% tax for police funding, and renewal of the 0.625% for streets, bridges and drainage.

Early criticism of the sales tax reallocation plan has been that sales tax revenue dedicated to the police department and to the street program are lumped in with the 30 years needed for the consent decree work.

McCutchen told Talk Business & Politics after Settle called for the resolution that he is eager to see the specifics of the resolution, but the group is likely to still oppose the overall tax plan.