Benton mayor proposes cuts in city's taxes

Plan would lower both real, personal property millages

BENTON -- Benton Mayor David Mattingly is proposing a new tax cut for residents of the Saline County city, a year after a previous effort was stymied by an amendment in the state's constitution.

Last summer, city officials wanted to help taxpayers by reducing personal property taxes.

But the tax drop wasn't possible without also lowering real property taxes because the Arkansas Constitution says the two millage rates must remain the same.

At the time, city officials weren't prepared to lower both. But Mattingly said last week that he plans to propose an ordinance at the City Council's Aug. 10 meeting to lower the millage rate on both personal and real property from 4.5 mills to 4.1 mills.

"I can't do them independently, so I'm going to lower both of them," Mattingly said.

The millage drop, which would appear on tax bills in 2017, would reduce city revenue by about $171,000, Mattingly said. The drop in the city's millage rate wouldn't affect taxes collected by the Benton School District.

A county assesses property at 20 percent of its appraised value. A mill is one-tenth of a cent, with each mill producing $1 in tax revenue for every $1,000 of valuation.

For a homeowner with a $100,000 house, the drop in the real property millage rate from 4.5 mills to 4.1 mills would mean a decrease in taxes from $90 to $82.

For the owner of a vehicle with an appraised value of $20,000, the drop in the personal property millage rate from 4.5 mills to 4.1 mills would mean a decrease in personal property taxes from $18 to $16.40.

"I'm comfortable this City Council knows and understands the purpose of doing this and will be supportive," Mattingly said.

Alderman Jerry Ponder, chairman of the aldermen's Finance Committee, said the loss of $171,000 will be more than recovered through tax dollars from new developments in Benton, such as the recently opened Hurricane Creek Village shopping center.

He said conservative sales tax projections on the retail center -- which includes a just-opened Academy Sports, a Kroger Marketplace opening later this summer and other retail parcels -- puts Benton "well ahead of the ballgame" in getting back the $171,000.

In the past 15 years, Benton has thrived because of new residents and new businesses.

According to the U.S. Census Bureau, the population of Benton was about 22,000 in 2000. By the 2010 census, the population had grown to 30,683. In 2013, an estimated 33,155 people lived in the city.

As the population has grown, so has Benton's tax intake. Between 2002 and 2013, property taxes collected by the city shot up from about $886,000 to $1.76 million.

Mattingly said sound budgeting has allowed the city to "operate in the black" for the past four years.

And if Mattingly has his way, he said, he would eliminate the city's personal property tax completely by the end of his term -- 3½ years from now.

But eliminating personal property taxes while maintaining real property taxes would require changing Amendment 79, which says in part that the "millage rate levied against taxable personal property ... shall be equal to the millage rate levied against real property."

Mattingly has asked state Rep. Kim Hammer, R-Benton, to push for changing Amendment 79 to allow the millage rates for personal property taxes and real property taxes to differ.

Hammer said he and Mattingly have already held discussions on moving forward with an amendment, and he hopes to have a proposal ready before the next legislative session.

Both Mattingly and Hammer say changing Amendment 79 is less about one city's financial success and more about giving municipalities a say in how they tax.

"To me it just doesn't make any sense," Mattingly said. "Why in heaven's name would you not let a municipality adjust? There's some reason. Where did it come from? I don't know."

State Desk on 07/27/2015

Upcoming Events