LR Mayor makes case for new 1% sales tax.

Scott envisions increase that would settle LR levy at 9.625% beginning in 2022

Nearly a month after he first said he will campaign for a new 1% sales tax in Little Rock, Mayor Frank Scott Jr. made his first pitch to the city directors who must pass the proposal before it can go to the voters.

During Tuesday’s policy discussion, Scott had Finance Director Sara Lenehan outline what the city had done with a three-eighths percent tax for capital improvements that was passed in 2011 and will expire in 2021.

The three-eighths percent tax was paired with a threeeighths percent tax that funds general operations and maintenance. If the new tax is passed, Scott said he will not push to renew the threeeighths percent tax, or for any additional tax in the city.

If the new 1% tax is passed, Little Rock’s local tax rate will be 2.5% through Dec. 31, 2021. After that, it will be 2.125%. Including state and county sales tax, consumers in Little Rock pay a total sales tax of 9%. If the proposed new city sales tax passes, they will pay a total sales tax of 10% in 2021 and 9.625% beginning Jan. 1, 2022.

According to Tuesday’s presentation, all capital projects funded by the new tax would be completed within the first 10 years. Scott said this would require some short-term financing, which would be a large bond undertaking.

“We would have to pay a lot of that back over a period of time and ongoing,” the mayor said. “We have to be upfront and understand what the operating costs are going forward … we want to be sure that we can maintain what we’re building.”

Keeping tax revenue projections flat, the proposed tax is estimated to take in $50 million in new annual revenue.

Scott said that during a discussion on March 10 he will provide the board with specifics on how much money will go to which projects, at which point the board will set a date to vote on whether to put the proposal before the people.

Scott has said the new revenue would support improvements to city parks and the Little Rock Zoo, improvements to infrastructure in underserved areas, new technology, education, economic development and job training, among other things.

“This decision would change our city for the next 25 years,” Scott said. “It’s that serious. It’s that important in how we grow our city.”

Ward 1 City Director Erma Hendrix said she was supportive and that she’d gotten calls from constituents who were, as well.

“Cities and counties that are close to Little Rock, they’re getting more than what we’re getting. I support this,” she said.

Ward 3 representative Kathy Webb said she was excited to learn more about the proposal on March 10, though both Webb and Ward 4’s Capi Peck asked if there would be any allocations for public transit.

“I’m excited about seeing what is going to be in here, the specifics of it,” Webb said. “As we have looked at city after city, we’ve got to do something to make these kinds of improvements, so thank you for being willing to put it forward.”

Scott said he believes the city already does its fair share to support public transit, contributing close to $10 million to Rock Region Metro.

Several of the current city board members were on the board in 2011 and worked to pass the previous tax. The city has completed or initiated the vast majority of the projects that were proposed, including upgrades to the 911 communications center, building two fire stations, installing street resurfacing and sidewalks, expanding the Port of Little Rock, and upgrading parks and the West Central Community Center. A new courts building that was initially planned will not be completed.

Ward 6 City Director Doris Wright said she felt that the endeavor was overall successful, but she did have some concerns.

Those include cost overruns that she said led to not getting a pool at the West Central Community Center — something Scott said the new tax will make possible.

Scott said he hopes to put the question to voters before September.

When asked why he planned to put the proposal on the ballot then rather than during November’s general election, Scott said “because it’s important.”