Voters in Eureka Springs rejected a 1 percent sales tax on Tuesday that would have gone primarily for improvements, maintenance and repairs of the city's aging water and sewer infrastructure.
With all 20 precincts reporting, the unofficial results were:
For 356
Against 703
The tax would have generated about $1.1 million a year and kept 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.
Berry said the only other option was to raise the water and sewer rates considerably -- anywhere from 25 percent to 80 percent.
"It looks like the people said, 'OK, we'll take the higher water bills,'" said the mayor. "I was very disappointed. I thought it was pretty obvious. Somebody's going to have to pay. It's either going to be us or the visitors."
Berry said the Eureka Springs City Council can raise the water and sewer rates without a public vote.
Twenty-five percent of the tax revenue would have gone toward the city's 87-year-old Auditorium.
Affectionately known as The Aud, the four-story limestone building on Main Street is used as an entertainment venue, but it usually loses money every year. Berry said it's difficult to make a profit on big-name performers in the 950-seat auditorium because of its small size.
He said the city needs to hire a full-time auditorium manager and establish a commission to oversee the building, but the tourist town of 2,073 residents doesn't have the money to do that.
The tax was to be in place for 10 years.
The proposed sales tax would have applied to spending across the board, including retail, restaurants and hotels.
Located in western Carroll County, 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.
Also on Tuesday, voters in eastern Carroll County approved a 2.5-mill property tax to help pay for emergency ambulance services.
With all 20 precincts reporting, the unofficial results were:
For 3,077
Against 2,937
The tax will bring in $550,000 to $600,000 per year, said County Judge Sam Barr of Carroll County.
Metro on 11/10/2016