1% prepared food tax supporters emerge

Prior to Feb. 8, a majority of the vocal sentiment appeared to be against the Fort Smith Board of Directors simply passing an ordinance to enact a 1% prepared food tax for the purpose of supporting Fort Smith Convention Center operations.

But that may have changed on Feb. 8, when four City Directors suggested a 1% prepared food tax go before voters instead of being enacted by board fiat. The formal vote on how to enact the 1% tax is expected to happen at Tuesday’s (Feb. 15) regular board meeting.

At issue is the future funding of the Fort Smith Convention Center. The Fort Smith board continues a more than 10-year search to plug an annual deficit predicted to occur when state turnback money dried up. The state turnback program ended for Fort Smith in June 2010 from which the city received about $1.8 million a year. In 2010, the city received only $888,723. A fund balance will allow the city to cover the convention center shortfall for most of 2011.

An ad hoc convention center committee formed by the city board met several times in Spring 2010 and reviewed many funding options, including a 1% hospitality tax, finding cuts in the city’s roughly $40 million operating budget, reallocating a portion of the city’s 1% street tax, re-instituting a business license fee and finding a 3rd party operator. That group eventually endorsed a 1% prepared food tax.

‘LITMUS TEST’
Jeff Smith, a financial planner in Fort Smith, was one of the first to respond. He sent an e-mail to more than 200 in the area, and posted his message on Facebook.

“Every ‘qualified opinion’ that has assessed the Convention Center shortfall (including our own A&P Commission and a special citizen’s ad hoc committee comprised of business men and women from our City), has recommended a 1% prepared food tax,” Smith noted in his message. “Although ALL agree that closing the Convention Center is not an option, covering the shortfall from the City’s General Account would directly take money from the Police and Fire budgets, as well as from things like Parks.”

Smith said of the more than 40 responses, only one has been negative. The response was what he most wanted to gauge.

“The general idea for sending it out was a litmus test. I wanted to see if I was off base ..  or if maybe I was on target,” Smith explained.

EXHIBITING BACKBONE
Richard Griffin, a prominent businessman in Fort Smith and chairman of the Central Business Improvement District, was also quick to respond to the board’s Feb. 8 straw vote on the issue. He addressed an e-mail to the four City Directors — George Catsavis, Don Hutchings, Kevin Settle and Steve Tyler — who called for an election instead of board enactment.

“I am disappointed in your unwillingness to step up, exert some leadership and vote for the funding. Have you considered your options should this funding not be approved at the ballot box? How then will you fund and operate the convention center? It is my opinion that Andre, Pam & Phillip are exhibiting some backbone and are taking the high road,” Griffin noted. “I appreciate your willingness to serve our community but this isn’t your finest moment!”

‘PASS THROUGH’
Prior to the board vote, Debra Presson, a Fort Smith Advertising and Promotion Commissioner and catering director for the Golden Corral, disputed the notion that only restaurants near the convention center benefit from the facility. She said the Golden Corral, more than a mile and several minutes from the convention center is busy when large groups arrive in Fort Smith.

“We’re packed with those big conventions come to Fort Smith. It was wall-to-wall when the Jehovah’s Witness were here,” Presson explained. (The Jehovah’s Witness congregation convention brought 28,000 people to Fort Smith in 2009 and 11,600 in 2010.)

Dr. Cole Goodman, in a conversation prior to Feb. 8, chastised The City Wire for not seeking comments from restaurant owners who support the 1% tax. Goodman is an owner in 21 West End and Doe’s — two restaurants located in downtown Fort Smith.

“What’s going to hurt the restaurant business is if the convention center fails. You want to talk about losing jobs? We probably got 60 jobs at the two restaurants, more or less, and we rely a lot on out of town guests,” Goodman explained. “This is the only way to go. It’s not really a tax, it’s a pass through.”

TIME HAS COME
Ward Henley, president of the Northside Town Branch Group, recently sent all members of the board a lengthy memo encouraging them to enact the 1% tax by ordinance rather than election.

“The time has come for Hard decisions to be made, even if the decision may be unpopular, it is the responsibility of the Fort Smith Directors to make decisions for the betterment of the City of Fort Smith,” Henley noted in his message. “I do not believe (there) is one City Director who wants the Convention Center to close. Decisions must be made that not only affects Fort Smith current environment but the future of Fort Smith.”

Under a memo category titled “Leadership,” Henley wrote: “The Responsibility of leading the City of Fort Smith rest on the shoulders of the Board of Directors, even if that leadership does not have the support of popular consensus.”

BEST SOLUTION?
So where was all this support for a 1% board enactment prior to Feb. 8?

“I can’t speak for everybody else, but my issue was that I kind of expected the directors would end up putting an end to it. I didn’t think this was something we’d have to fight for. … You know, when you’ve had all this research that points to the 1% solution, you just expect that they (directors) would follow that,” said Smith, who also added that he was initially against the 1% tax until he did his own research into the matter.

The only response Smith has received from the city board has been from City Directors Andre Good, Philip Merry Jr., and Pam Weber — the three directors who supported board enactment of the 1% prepared food tax.

Smith offered more of a hope than a prediction on the results of an election on the 1% prepared food tax.

“I would like to believe that people, that the general public is smart enough to see what the best solution is, and to follow the advice that has been given from people who have studied this from every angle,” Smith said.