City Board will do some pro-tax politicking this week | Arkansas Blog

City Board will do some pro-tax politicking this week

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MARCHING ORDERS: They come from the Little Rock Regional Chamber of Commerce and the City Board does as it's told.
  • MARCHING ORDERS: They come from the Little Rock Regional Chamber of Commerce and the City Board does as it's told.
The Little Rock City Board has some added items to its agenda this week — resolutions to endorse the Little Rock School District tax proposal up for a special election May 9 and to urge the legislature to find a way to get Internet merchants to collect the city sales tax.

The School District, which is smaller than the city at large, has a proposal May 9 to extend 12.4 mills of property tax (about 18 percent of the annual average property tax in the county, or almost $370 a year on a $150,000 home) for 14 years.  It will pay for some construction, but also guarantee continuation of surplus money (currently about $26 million a year) to use any way the operators of the district want to use it. The state of Arkansas currently is running the district because the state Board of Education abolished the elected school board two years ago.

The city is late to the party on the Internet. The legislature debated at length but ultimately failed to act on legislation to encourage Internet sales tax collection including by merchants without operations in a state. Court precedent has discouraged the collection to date, though a so-called use tax is legally owed by purchasers of goods on the Internet. As a practical matter, few purchasers of goods volunteer the tax payment. The city blames all its recent lagging revenues on the migration to Internet sales and that has had a decided impact. But it also has lost business to suburban cities, growth that the city has encouraged in various ways. The single biggest Internet merchant, Amazon, voluntarily began collecting a sales tax in Arkansas in March. Later this month we should get some indication of the impact on state and local tax revenues.

The City Board has been AWOL on school issues for decades and contributed mightily to its problems years ago by allowing areas to join the city without joining the school district. NOW, it wants to give the state more money to control. To understand this resolution fully you have to know that leaders of the Little Rock Regional Chamber of Commerce led the move for a state takeover of the majority-black led school district and they are now leading the charge for the millage vote. The resolution says the millage increase is "key" to a return of the district to local control. This is wishful thinking. Local control is based on academic attainment, a measure with little relationship to facilities. 45 of the 48 schools are achieving sufficiently, but Education Commissioner Johnny Key and the majority of the state Board of Education Thursday made clear they are in no hurry to return the district to local control. Some seem to prefer state control.

And more about chamber of commerce influence on this board: City Manager Bruce Moore indicated to me this week that the city will keep private much information exchanged by the chamber and the city in the new contract to pay the chamber $300,000 a year to subsidize its operation.

I got this response to a question about city  response to FOI requests about expenditure and  representations about law and policy in the city:

Anything that puts us at a competitive disadvantage will not be released. 
That means we'll get little but sketchy quarterly reports and pro forma financial statements and virtually nothing of specific value on what the city is getting for its money and what is being said on important policy issues in the business recruitment process.

Moore's answer dopts the University of Arkansas view of the FOI law. This is that the public's government, financed by taxpayers, has a "competitive" interest sufficient to shield its operations from its citizens. This is nonsense, not yet supported by Supreme Court precedent though some lower court judges have bought into the UA line of reasoning. The law has understandable protections to prevent a government from sharing critical information, such as financial data, about a private company (though not necessarily, for example, a company's wish that it be able to do business in a way that legally discriminates against classes of people). But the law isn't meant to allow the government to keep secret its operations.

It was just another piece of how evidence of how the chamber of commerce owns city government. The chamber's money passed the last city sales tax (it got $21 million for a real estate play known as the Tech Park in return) and it controls the pivotal at-large seats on the city board.

You can trust city government about as much as you can trust Johnny Key, whom the city wants to give $600 million in additional spending authority even as he rushes to destroy city schools with charter school expansions.

The city resolution on the tax reveals what the bond issue business is really about:

The improvements to LRSD facilities would infuse approximately $160 million into the local economy;
If contractors (and bond lawyers and underwriters) are happy, the chamber is happy. If the chamber is happy the city board is happy. The poor folks who pay the pennies and who are often disadvantaged by business industry lobbying aims can take comfort that they are helping to pay the lobbyists' salaries and those of the guys in fancy suits in the tall towers downtown.

The city will take its final vote — approval is assured — of resuming the $300,000 chamber of commerce subsidy payment Tuesday night. The money was stopped two years ago by a judge's ruling that these payments were unconstitutional. A new constitutional amendment approved in November fixed that. It was, incidentally, the work of Sen. Jon Woods, now under indictment for taking kickbacks from state money shipped to a Christian college in his district.


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