1% sales tax to appear on Eureka Springs ballot

Voters in Eureka Springs will decide Nov. 8 if they want to levy an additional 1 percent sales tax that would go primarily for water and sewer improvements.





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The Eureka Springs City Council approved an ordinance Monday to put the issue on the general election ballot. The council had given tentative approval July 25 before passing the ordinance unanimously on its third reading Monday.

The tax would generate about $1.1 million a year and keep the city from having to raise water and sewer rates, said Mayor Robert "Butch" Berry. Berry said Eureka Springs attracts more than a million visitors a year and they should help pay for the work.

"None of us like to see a tax increase, but the City Council and myself couldn't see an alternative way to raise the money to fund the necessary requirements for our water and sewer infrastructure that are needed," Berry said. "The only other option was to raise the water and sewer rates so astronomically high that it would be prohibitive, and we didn't want to do that."

If it passes in November, the tax would be in place for 10 years.

"This is not an easy decision to make, raising the taxes on the people here," Alderman Terry McClung said during Monday's meeting. "I don't want to have to pay it, either. So it's with a lot of real concern for the community that this is done in the first place."

"This is an academic exercise because it will take a vote of the people in November," Alderman James DeVito said at the meeting. "It is the will of the people in November that will have the force of law behind it."

The proposed sales tax would apply to spending across the board, including retail, restaurants and hotels.

Under the proposal, three-fourths of the revenue generated by the sales tax would go toward sewer and water improvements, maintenance, repairs and operation, with one-fourth going to the city's historic auditorium.

Eureka Springs currently has total sales tax rates of 9.375 percent on basic retail sales, 12.375 percent on prepared food and 14.375 percent on hotels. Those rates include state and city taxes.

By comparison, Little Rock's total sales tax rate is 9 percent on basic retail sales, 11 percent on restaurants and 15 percent on hotels.

If the measure passes, Eureka Springs would have the second-highest city sales taxes in the state, according to figures from the Arkansas Department of Finance and Administration.

Metro on 08/10/2016

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