FAYETTEVILLE -- The city's primary source of money for operations and some capital expenditures will continue for another 10 years.
Final, but unofficial, results in a special election Tuesday were 1,079 votes, or 78%, in favor of continuing the city's 1-cent sales tax, and 307 votes, or 22%, against.
Participation was 1,388, or 2.5%, of 54,832 registered voters in the city, according to the results. There were two overseas ballots yet to be counted, according to the Washington County election coordinator.
The tax now will expire June 30, 2033.
Mayor Lioneld Jordan said the results will help keep the city on solid footing financially. City sales tax revenue has remained strong despite so much uncertainty around the pandemic, he said.
Jordan described the results, leaning heavily in favor of continuing the tax, as a mandate.
"That's when you really know that people believe in what you're doing," he said.
The tax generates about $22.5 million in revenue for the city each year. About $13.5 million goes to operations, mainly personnel. Another $9 million goes to capital expenditures such as equipment and vehicles for the police and fire departments, street overlays, sidewalks, drainage and trails.
The tax contributes to about 27% of total revenue for the city's $49.5 million general fund. About 81% of the general fund is made up of personnel costs. There are nearly 500 full-time equivalent positions across all departments paid for under the general fund.
Continuing the tax will enable the city to maintain the current level of services to residents, Fayetteville Chief Financial Officer Paul Becker has said.
Becker posted an example on the city website of what could have happened if the tax had not passed. About 150 employees could have lost their jobs if a 27% cut were made evenly across departments, he said.
The result could have been about 48 of 176 police employees and 33 of 122 employees in the Fire Department being let go. Seven full-time equivalent positions could have been eliminated from the Parks Department.
The city's contracts for services with outside organizations such as Boys & Girls Club, 7 Hills Homeless Center, Area Agency on Aging for the senior center, public access television and the Arkansas Air & Military Museum could have been drastically reduced or eliminated.
On the capital expenditures side, there no longer would have been a revenue source for programs such as street overlay, new sidewalks and trails and equipment and technology upgrades and replacements, Becker said.
The reduced revenue would have taken effect in the 2023 budget. The expiration date was set at June 30, 2023.
Tuesday's vote marks the third time voters have continued the tax. Previous special elections were held in 2011 and 2002, with a majority of voters in support. The City Council enacted the tax in 1993.
Fayetteville overall has a 9.75% sales tax rate. One penny of the 2% city sales tax was the one up for continuation. Voters renewed the other penny in an April 2019 special election to pay off $226 million in bond projects.
Washington County's sales tax rate is 1.25%, and the city receives a portion.
The state sales tax rate is 6.5%. The state receives all the revenue from the tax.
In addition to the overall 9.75% sales tax rate in the city, there also is a 2% hotel, motel and restaurant sales tax. Half the tax goes to tourism and half goes to parks.
