Benton adds levy extension to agenda

BENTON — The city is considering extending a 1.5% tax on hotels and restaurants in the city, but some small businesses say it’s hard to support, especially after a tough financial year during the covid-19 pandemic.

Mayor Tom Farmer said the advertising and promotion tax was approved previously by voters for the construction and operation of the Benton Event Center. It was set to expire with the paying off of bonds in 2027 but the A&P Commission, which manages the funds, is set to the pay the bond off early in February 2022.

“The commission has done an outstanding job of saving to pay the bond off early in addition to managing the event center which has brought in revenue for the city by the crowds of people who have attended the many events that have been offered,” Farmer said Thursday. “These people ate and bought gas in our city.”

A proposed ordinance before the City Council would extend the tax until 2041 and produce about $1.5 million annually for various projects, Farmer said. He said the council would need to approve two readings of the ordinance.

A public meeting on the issue will be held from 6 p.m. to 8 p.m. Monday in the Council Chambers, 114 S. East Street.

A second meeting is scheduled for 6 to 8 p.m. April 5 at the Benton Event Center, 17322 I-30 North.

Farmer said he was unable to provide revenue data for the 28,000-square-foot center that opened in 2013. He said the city’s chamber, which manages the center, was better positioned to answer the question.

The Benton Area Chamber of Commerce didn’t respond Friday to a request for the information.

Continuation of the tax would help the city build numerous projects including bike and nature trails, a disc golf course, an indoor/ outdoor water park, a soccer complex, a tennis and pickleball complex, neighborhood small parks, public pull-outs along the Saline River and a campground.

The projects are roughly estimated to cost about $50 million and the tax would pay about half of the costs, Farmer said.

“In the next 20 years we could grow in population and areas,” Farmer said. “If we can offer the same quality of life northern Arkansas offers, we will draw tourism and, in return, people will want Benton to be called home for them.”

Asked about the response from businesses within the community, Farmer said some love the idea and others don’t.

“This is a pass-through tax,” he said. “There are cities that have done away with the AP commission and no business bothered to lower their prices to reflect the discontinued tax.”

Eddie Jones, owner of Jimmy’s Diner, said the tax is one more burden in an industry that has been hard hit.

“I lost $73,000 last year, and I had to pay my A&P tax every month,” Jones said. “They can care less about the businesses. All they care about is money.”

Jones said money from the tax hasn’t directly benefited his business. He said the money should be used to promote restaurants and businesses.

“All the restaurants are the ones paying the tax but we are not being represented as we should in the city of Benton,” Jones said. “They put the tax in to pay for the Benton Event Center. The center is paid for. They need to do away with it.”

Jones said Friday he had not been contacted by anyone from the city.

“Maybe they need to go around and start talking to businesses and get their input and see what is what,” Jones said.

Benton isn’t alone in having an A&P tax. Every Arkansas municipality the size of Benton or larger has some type of A&P tax in place.

State law allows all municipalities to place an A&P tax up to 3% on hotels and/ or restaurants. Larger cities can expand that tax up to 4%.