For anyone who shops, dines out at a restaurant or stays the night at a hotel, the cost will be a little bit more in North Little Rock this year.
North Little Rock voters approved a 1 percentage point city sales tax increase, to 2 percent, in an August special election. The City Council in November approved a one-half percent increase in the city's lodging tax that primarily affects hotel room stays.
Collection of both taxes begins today.
The sales tax is applied to all purchases made within the North Little Rock city limits, whether buying a product or a service, renting a hotel room for a night or buying a prepared meal.
The total sales tax collected in North Little Rock rises to 9.5 percent. That comprises a 6.5 percent state tax, North Little Rock's 2 percent sales tax and a 1 percent Pulaski County tax. Buying a prepared meal already comes with another 3 percent levy in the form of a prepared food tax, or "hamburger tax."
The city's lodging tax of 3.5 percent, collected for the North Little Rock Advertising and Promotion Commission, is applied to nightly rentals of hotel and motel rooms and at bed-and-breakfast businesses, campgrounds and three RV parks in the city.
When added to the 9.5 percent in sales taxes and a 2 percent state Parks and Tourism tax, the total taxes charged in North Little Rock will be 15 percent for each night's lodging rental. The lodging tax originally was to increase by 1 percentage point, but that was reduced to one-half percentage point so the total charge on room rentals would be the same as in neighboring Little Rock.
"We did send out letters [in mid-December] to all hotels reminding them to start the new collection in January," said Bob Major, executive director for the North Little Rock Convention and Visitors Bureau.
Revenue from the new charge to hotel customers will go toward the Convention and Visitors Bureau's share of a planned three-story building close to the planned downtown plaza on Main Street. The bureau, overseen by the Advertising and Promotion Commission, will move into the building to manage the plaza and all events there.
The overall lodging tax in the city is projected to raise $1.14 million in 2018, according to the commission budget, which is separate from the city's general fund. The addition to the lodging tax is projected to raise about $163,000 of that total.
The addition to the city sales tax is projected to bring in $13.2 million over 10 months, with revenue not appearing until March. Collections and the state's distribution of tax revenue back to the city lag about two months behind.
The city's sales tax increase is divided into a one-half percent permanent tax to fund general operations and maintenance and a one-half percent temporary tax, to expire after five years, that will fund capital projects. The city will use the capital part of the revenue for a new police and courts building, fire station improvements, and street and drainage projects.
Over the five-year life of the temporary tax, it is projected to provide $20 million for the police and courts headquarters, $10 million for fire stations and $10 million for streets and drainage. The streets and drainage part will be divided evenly among the city's four wards, which are projected to receive $500,000 each year for the next five years -- for a total of $2 million a year citywide.
"The council members from each ward will make the decision about what [staff-recommended] projects get done out of that $2 million," city spokesman Nathan Hamilton said recently. "That is what we said we're going to do, and that's what we're going to do."
Mayor Joe Smith has his eyes on the North Little Rock School District Administration Building and the Arkansas National Guard's Fisher Armory -- on school district property -- as the site for relocating the police and courts building and police administration offices. The move would involve a transfer of the city's police and courts building and police administration complex properties in exchange for the school district properties.
The North Little Rock School Board hasn't yet taken up the proposal. Once that is done, Smith has said, he will take the same proposal to Maj. Gen. Mark Berry, the state adjutant general, for relocation of the armory.
Construction of the police and courts building is expected to start in the first quarter of 2019 and take 12-18 months, Hamilton said. The city is hiring an "assessment consultant" with experience in building modern police buildings, he added.
"We are very much aware that we have not built a police station in 60 years," Hamilton said. "Policing has changed so much, we realize we have no expertise in that area. We think it will take all of 2018 to plan a $20 million building."
For fire stations, Hamilton said, remodeling work is planned at six stations, costing $1.5 million, based on the new tax collections in the first year. Station 4, at 8723 Maumelle Blvd., will also add space for North Little Rock police to occupy, giving the far western part of the city an improved police presence, Hamilton said.
"In all of 2018, we'll be working on a location for a brand new Station 6," Hamilton said. The station is in the Levy area, 3500 Camp Robinson Road.
Major said he doesn't think the simultaneous increase in the city's sales and lodging taxes will negatively affect the city's hotels or other lodging spots.
"I just don't know many people that look at the tax structure of where they're going to stay," Major said recently. "Was the room clean? Was the staff friendly? That's what people remember.
"If you add a charge like a resort fee and a fee for parking, it might," Major said. "People don't like to pay $15-$30 to park their car at a hotel. But I don't think there's any hotel lodging property here that charges its guests to park.
"I think people do look at the room price, a lot look at the hotel brand, ones with a frequent-guest program and then also the location of the property," he said. "I don't know many who would go past the cost of the room. I don't think whatever the composition of the actual taxes that are collected, are ever considered."
A Section on 01/01/2018