Wednesday, August 09, 2017

EDITORIAL >> How much for sales tax?

Lonoke will vote to double its sales tax to 3 percent on Nov. 14 to pay for $16 million in much-needed repairs to its water and sewer lines and increase funding for the police and fire departments.

Lonoke isn’t alone. Sherwood is expected to set a sales-tax election soon. Jacksonville has established a special commission, which met for the first time Tuesday, to explore long-term funding challenges and explore a tax increase. Its members are Aldermen Mike Traylor, Les Collins, Kevin McCleary, Reedie Ray, Mary Twitty, James Bolden and Barbara Mashburn.

Jacksonville Mayor Gary Fletcher formed the panel realizing that cities will not be able to raise sales taxes much more in the future. We hope cities explore ways to reconfigure state and federal turnback formulas to better fund road projects and other infrastructure needs.

Sherwood has a long list of needed road projects, including extending Maryland Avenue to connect with Brockington Road. The city has said it needs more revenue simply to repave its streets. It’s bracing for a loss of $600,000 annually, which is its share of a state gasoline tax that will expire in about five years.

Cabot in recent years extended its sales tax rate to issue more bonds to build a new swimming pool, ball fields and improve drainage all over town.

Cities get about two thirds of their operating revenues from sales taxes. That doesn’t leave much to sufficiently pay for maintaining infrastructure.

If Lonoke succeeds, its new sales-tax rate will be 3 percent, placing it among the highest rates in the state shared only by Bryant, England, Gould, Hazen, McGehee, Mena, Menifee, Stuttgart, Sunset and West Fork. Most cities’ sales taxes are between 1 and 2 percent.

Who’s cheapest? Beedeville, Pyatt, Rudy and Marshall with .5 percent sales taxes.

Sherwood wants voters to increase its sales tax to 2 percent. Its current rate is 1 percent, as is Beebe’s and North Little Rock’s, which is the lowest in The Leader’s coverage area.

Sherwood expects a one-cent increase will raise $2.4 million annually. The increase would be approved in two separate measures making one .75 percent increase permanent and the other .25 percent will expire in eight years.

Jacksonville, Cabot, Ward and Austin have 2 percent sales taxes, and no increases are imminent. Carlisle’s sales tax is 2.125 percent.

Then shoppers have to add on Arkansas’ state sales tax – 6.25 percent – and county sales tax – 1 percent in Pulaski and Lonoke counties and 1.75 percent sales tax in White County. And Jacksonville, Sherwood and Cabot have so-called hamburger taxes on prepared foods, which is an additional 2 percent.

It all adds up.