BENTONVILLE — Benton County’s Finance Committee on Thursday reviewed steps needed for a sales tax increase as the funding method for a new courts building.
The justices of the peace heard a report on options from Jill Drewyor, an attorney with the Mitchell-Williams law firm, which has experience in municipal financing. Drewyor told the panel the county can’t increase its 1 percent sales tax or reapportion the revenue.
The sales tax revenue is divided among the county and cities on a per capita basis and Benton County receives just under 20 percent of the revenue. For 2015 the county has projected its sales tax revenue at $7.3 million, the same amount the county received in 2014. Sales tax receipts for the year show the county $264,407 ahead of its budget target.
In a May 7 presentation to the committee, Bob Wright with Crews & Associates told the committee revenue from courts costs and fines is probably insufficient for a project of that size, particularly since the revenue already is included in the budget.
A property tax or sales tax increase are more adequate sources of revenue, but both require voter approval, Wright said. In Wright’s briefing, he gave the justices of the peace a breakdown of revenue from sales tax increase ranging from a 1/8 percent tax increase that would raise about $4.4 million a year, to a 3/4 percent tax increase that would raise about $26.5 million a year.
Drewyor said the county can issue bonds to finance the building, but isn’t required to do so. If the revenue from a sales tax levied for three years or less is sufficient to pay for the planned improvements the county can dispense with the bonds and appropriate the sales tax revenue to pay for the project directly.
“The Quorum Court is going to have to determine what’s needed and then what is most palatable to the voters,” she said.
A sales tax can be designated for use by the county, meaning all of the proceeds will go to the project. Some justices of the peace suggested designating a portion of the tax, possibly 1/8 percent, for maintenance and operating costs. Kurt Moore of District 13 argued against a proposal that would retain any of the tax increase.
“The problem with the 1/8 cent residual tax is it’s going to generate about $4.5 million a year,” Moore said. “It’s going to be hard to get the residents of the county to swallow. I’ve been an advocate of having something that’s one-yearand-done. If that’s not enough, the county will kick in whatever is needed to complete the project.”
The committee delayed until 2016 a proposal to end countywide cleanup events and replace them with an expanded convenience center.
Officials began to search for alternatives last year because of increasing costs. They also began to look at ways to the expand the convenience center, which offers similar services.
The Public Safety Committee heard the proposal Monday and recommended it to the Finance Committee for further discussion. Several justices of the peace argued in favor of keeping at least one of the cleanup events even if the convenience center operation expansion is a success. Barry Moehring of District 15 said he thinks the cleanup events have grown in popularity over time and should be considered separately from the convenience center.
Courts building
A study on a new Benton Count courts building identified locations in downtown Bentonville and on county property on Southwest 14th Street adjacent to the Benton County Jail. Th Public Safety Committee has endorsed keeping the courts downtown. The preliminary plan for a downtown complex calls for a four-story building on Second Street with space for five courtrooms and related offices and shell space for two future courtrooms. The plan would renovate the county courthouse and annex building for use by the judicial system. New construction costs on the downtown project are estimated at about $24 million.
Source: Staff report
Tom Sissom can be reached by email at [email protected] or on Twitter at NWATom.