A Service of UA Little Rock
Play Live Radio
Next Up:
0:00
0:00
0:00 0:00
Available On Air Stations
Classical KLRE 90.5 transmitter is experiencing technical difficulties. We are working to have it resolved as quickly as possible. KLRE web stream is working.

Little Rock voters to weigh in on sales tax increase

The Little Rock Board of Directors on Tuesday voted to delay deciding how to spend most of the federal money the city received as part of the American Rescue Plan.
Brian Chilson
/
Arkansas Times
Little Rock voters will see two proposals to increase the city sales tax on the 2024 ballot.

On Election Day, Little Rock residents will have the chance to vote on a proposal to raise the sales tax by one percent.

Little Rock Mayor Frank Scott Jr. says the city needs money for projects he wants to see built, so he is once again trying to up the sales tax.

“Everyone believes that we need to invest in our city,” he said. “Everyone wants to take care of the existing things that we have, but they also want new things. Its not an 'either or,' it's a 'both and.'”

On the ballot will be two proposals; the first one raises the sales tax by three-eighths of a percent, while the other raises it by five-eighths of a percent. The plan is that, over 10 years, the tax will raise $650 million for the city.

The city estimates an average annual cost of $200 for a family of four making the city's median income.

If passed, the money could go to fund dozens of services. For example, $8 million goes to the fire department, $20 million goes to addressing homelessness and $15 million goes to improving parking and bridges.

This gamut of services falls under what Mayor Scott calls “The Four P's,” port, parks, public safety and public infrastructure. Something he also often talks about as quality of life and place.

“We've seen growth since we took office in 2019,” he said. “And to continue to fuel that growth in a strategic way, we have to focus on quality of life and place.”

The mayor has been wanting a higher sales tax for years. He first proposed a similar increase in 2021, but the measure failed with almost 8,000 people voting yes and about 13,000 voting no.

Scott says this time is different.

“The proposal was probably a bit bold for the electorate in the middle of a pandemic.”

The city has been trying to fill in holes in their infrastructure using tranches of money from the American Rescue Plan Act, but now they say they need even more cash to keep the city safe and improve infrastructure.

Little Rock Police Chief Health Helton is voting for the tax because he wants the money for safety projects that make his job easier.

“Some of the things that we are being challenged with right now,” he said. “This will help us address those issues.”

The tax would give $15 million to community oriented policing. This includes mental health response teams, that go in tandem with officers on calls where someone is having a psychiatric emergency.

“Our community response team will roll out, make contact and then look into ways to get that individual the help that they need.”

$50 million would go to new police cars. Another $30 million would go to the city’s Real Time Crime Center, a central hub of surveillance cameras which opened in 2022.

“Great example out of Baseline and Chicot, a shooting occurred,” Helton said. “Within 30 minutes of that shooting, we were able to get information real-time and send detectives out.”

Jon Honeywell heads the city's Department of Public Works, which manages trash, drainage and building maintenance. He's also voting for the tax increase, which would dedicate $48 million to fixing roads.

“Part of that funding will go toward street resurfacing,” he said. “Which is patching potholes.”

A main argument against the increase is that sales taxes are inherently regressive. Typically, sales tax increases are most noticed by lower-income residents who struggle to afford basic necessities, people for whom a small tax adds up.

And Little Rock already has a sales tax rate of 8.625%.

Kamolika Das is a researcher at the Tax Policy Center, and an expert on tax structures. She is part of an analysis ranking states by regressivity in their tax structure. Arkansas is the ninth most regressive state. Just six years ago it was ranked the 20th. She says half of the state’s revenue comes from a tax that unfairly impacts low-income Arkansans.

“In Arkansas especially, legislators have just been taking a hammer to their income and corporate taxes,” she said.

In 2023, the Arkansas Legislature passed a law preventing individual municipalities from enacting their own income taxes. So city officials who want to improve public services often find their hands tied.

“If the state had kept in place the income tax, there would be so much more money to actually give to municipalities, and then they wouldn't be so strapped to make these really difficult decisions.”

Das estimates $2 billion in lost revenue statewide, all stemming from rolling back the state’s personal and corporate income taxes. That's enough to give every public school teacher in Arkansas a $60,000 bonus.

So cities that need extra revenue say they are in an “impossible position,” raise the sales tax or cut services.

Mayor Scott made the same point.

“There’s no municipality in the State of Arkansas that can survive without a sales tax. We only have a few different revenue streams that we can access.”

Along with policing, one of the more controversial parts of the Little Rock sales tax plan is the money that would go to build two youth sports complexes.

“Youth sports is heavy within this region,” Scott said.

The expenditures would go to build an indoor and an outdoor sport complex each costing the city roughly $60 million. Mayor Scott said there may be chances for new revenue streams from the complexes after they are built.

Note: A previous version of this story misstated the average economic impact of the sales tax increase on taxpayers.

Josie Lenora is the Politics/Government Reporter for Little Rock Public Radio.