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A tale of two taxes

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The organized campaigns for and against the tax proposals to be voted on Sept. 13 by a small subset of Little Rock kicked off this past week. The pro-tax Committee for Little Rock's Future emphasizes that "the penny" will go to "create a bold vision for Little Rock." The group opposing the proposals calls them a "$500 million tax" and says that's too much.

It's smart politics to simplify the issue by hermetically connecting the issues, but the voters on Sept. 13 actually will cast two votes on two fundamentally different tax measures. Voters — the final legislators in this referendum — need to think about these taxes (and their impact on the city) individually. If they do so, more split tickets may be cast than either side expects — or wants.

The arguments for the second ballot item — a permanent 5/8-cent sales tax for operating expenses — are markedly stronger. The sales tax is an inherently regressive tax, but the state constitution sharply limits the revenue enhancement tools available to municipalities. Little Rock also is a special case because many suburbanites and tourists use city roads and services on a daily basis and would pay a decent share of the tax.

Whatever the problems of city government, there is simply no doubt that Little Rock needs more revenues for its current services and the mostly worthwhile new projects to be covered by the permanent tax. The opposition claims that this tax is too big, but does not argue that additional revenues aren't needed. The city's inability to meet its contractual obligations to raise the pay of police and firefighters and the closure of alert centers in challenged neighborhoods a year ago will be nothing compared to the ugly budgeting process in the years ahead without new revenues. If raised, the permanent sales tax will still be below many Arkansas cities that lack the complex issues facing the state's largest city.

A rebuilding of trust between government and citizens, a plan to close race and class divides in the city, and a sense that public schools in every part of the community work are all essential to propel the city forward. But, new revenue is fundamental for the city to progress.

The justification for the other ballot item — a 3/8-cent tax that covers a variety of capital projects across its 10-year lifespan — is considerably weaker. Some of the projects to be funded by this tax (such as the new 12th Street police station) benefit poorer parts of the city, but more benefit wealthier West Little Rock and business interests. The city failed to pay for sprawl to the west with impact fees and now proposes that all of its citizens pay for new roads and firehouses in that area with this tax. As a result this tax plan is decidedly more regressive. While many of the "economic development" components in the proposal can most charitably be deemed "ill-defined," other parts will indeed immediately create lower-wage (but essential) jobs that will benefit parts of the city facing enormous unemployment rates. The creation of needed jobs and a number of valuable services (goals markedly absent from the recent national economic debates) nudge me towards a "yes" on the 3/8-cent tax at this writing, but I continue to grapple with this second ballot item.

Thoughtful, progressive folks are front and center in both the pro- and anti-tax campaigns. It's crucial for the city's lawmakers — in this case the rank and file voters — to ask tough questions in the month ahead so that they make the right call on these two tax proposals.

Jay Barth is the M.E. and Ima Graves Peace Distinguished Professor of Politcs at Hendrix College.

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