North Little Rock Mayor Joe Smith told about 30 residents from the city's east side Thursday evening that a proposed 1 percentage-point city sales tax increase would satisfy the city's financial needs "well into the future."
The City Council has set an Aug. 8 special election to ask city voters to approve the tax increase. Early voting will begin Aug. 1.
Proceeds from the tax increase, if approved, will be divided equally for two purposes: a permanent half-percent tax for city operations; and a half-percent tax lasting five years for upgrading streets and drainage, fire stations and the police and courts building. Voters will be asked to decide on the full 1 percent instead of voting on each half-percent issue.
The tax is projected to provide $16 million annually.
"The bottom line is we have a lot to do, and I think this penny will help us," Smith told those assembled in the Sherman Park Community Center gymnasium, the second of five town-hall meetings throughout the city to pitch the tax proposal. "This penny will last us a long time."
The next town-hall meeting is July 13 at North Heights Community Center.
After Smith's 20-minute presentation, some expressed their concerns about the city's priorities.
James Green of the Sherman Park Neighborhood Association told Smith that while he "commends the funding mechanism" proposed, he found fault with the "scope of the funding mechanism," explaining that the additional tax wouldn't reach deep enough into solving individual neighborhood problems. Others mentioned upgrading housing and the lack of neighborhood grocery stores.
"It's not laid out in a way that will benefit the balance of North Little Rock," Green said. "I just think the scope of it is deficient."
Tracy Steele, a North Little Rock School Board member, said poor conditions of public housing in the city, particularly the Eastgate complex, which can be seen while driving along Interstate 30 downtown, "is the impression you're going to have of North Little Rock." Smith agreed but emphasized that public housing complexes are federal property.
Steele also asked if any of the tax revenue would be used to pay for a downtown plaza that Smith has proposed as a gathering place to attract retail and restaurants around it. The plaza's funding, Smith said, has come from city property sales and some capital funds from the Parks and Recreation budget.
"The plaza is all about making North Little Rock a special place to be," Smith said. "We've got to make the city something special. Used to, you would find a job somewhere, then move there. Today, the educated and employable decide where they want to live first, then try to find a job. Whether this penny passes or not, there will be a plaza."
City expenditures have outpaced city and county tax collections over the past 10 years, Smith told the group. The lack of new revenue would lead to about a $5 million shortfall in next year's general fund budget that pays for city services and worker salaries. The city would also face depletion of its reserves by 2019, according to city projections.
About 75 percent of the city's operational costs go to payroll, Smith said. The city has raised salaries to help keep the police officers, firefighters and city electric department linemen from jumping to similar jobs in other cities after North Little Rock spent money on their training, he said.
"In order to recruit and get good people to apply, we had to do that," Smith said. "We're 'in market' with all of our staff. We need to stay 'in market' or we'll lose all of our people."
Deborah Rhodes, of the North Little Rock NAACP, said after the meeting that she has "some concerns" about the tax proposal, but that's why she wanted to hear the presentation.
"I want to make sure that the city has already trimmed all the fat from the budget before asking for a tax increase," she said. "I know we have plenty of needs. I attended this because I wanted more insight to those needs. But I also want the mayor and city officials to listen to what we're saying, and if they need to go back to the drawing board first, then that's what needs to be done."
Customers in North Little Rock pay a total 8.5 percent sales tax. That includes the state's 6.5 percent sales tax, North Little Rock's 1 percent tax and a Pulaski County 1 percent tax.
Metro on 06/30/2017