Little Rock voters are being asked to approve a sales tax increase to fund improvements to parks, public safety, infrastructure and the Port of Little Rock. (Getty Images)
This article first appeared in the Arkansas Times and is used by permission.
Little Rock voters have a big decision to make at the ballot box next month: Whether to pass the “Results for the Rock” tax, a 1-cent sales tax increase that could have major impacts on both the city and residents’ wallets.
Voters resoundingly rejected a similar tax proposal, “Rebuild the Rock,” in 2021. But Mayor Frank Scott Jr., who proposed the new plan with support from the Little Rock Board of Directors, hopes this time will be different. The 2021 tax proposal was put to voters while the economy was still recovering from the COVID-19 pandemic. It also included some projects that are not a part of the current plan, such as a $45 million early childhood education plan.
Supporters of Results for the Rock generally talk about it as a single tax, but it’s actually made up of two separate pieces: A ⅝-cent tax for building and improvement projects that would expire after 10 years, and a permanent ⅜-cent tax for general operational purposes.
The two increases will appear as separate questions on voters’ ballots on Nov. 5, meaning one could potentially pass without the other. Early voting began Oct. 21.
A 1-cent sales tax increase means consumers would have to pay an additional penny on every dollar they spend in Little Rock. The ⅜-cent tax, which city officials say would increase the city’s operating budget by 28%, would stick around after the ⅝-cent tax expires.
Consumers in Little Rock currently pay a sales tax rate of 8.625%, with 1.125% going to the city, 1% to Pulaski County and 6.5% to the state. If passed, the increase would bring the overall sales tax rate to 9.625%, with 2.125% going to the city.
The city projects the full 1-cent increase would rake in $650 million over the next 10 years. That money will mostly go toward what Mayor Scott calls the “Four Ps”: Parks and recreation, public safety, public infrastructure and the Port of Little Rock, though some other projects that fall outside those categories would get a boost as well. Here’s a broad overview, based on a project list distributed by the city:
A Flourish chart
City officials have outlined fairly detailed plans for some spending categories while others remain fairly vague.
Parks and recreation
Parks and recreation would get about $295 million, or 45% of the total revenue, according to the sales tax project list. Of that total, $115 million would fund construction of an indoor sports complex downtown and an outdoor sports complex near the Otter Creek neighborhood, both of which the mayor has frequently used as selling points for the tax.
A Flourish chart
At the July 30 city board meeting, Chemia Woods, a member of the city’s Parks and Recreation Commission and a youth basketball coach, said, “Supporting the sales tax initiative is a no-brainer.” Her girls basketball team rarely plays in tournaments here because “we don’t have a sports complex to house the 10, 20, 30, sometimes 50 teams that play,” Woods said.
Building sports complexes could make Little Rock a regional destination for youth sports tournaments and bring in tax dollars from traveling teams, supporters say.
The rest of the money would fund more than a dozen new and ongoing projects, including $28 million for upgrades and renovations to Hindman and War Memorial parks, $30 million to implement the Little Rock Zoo Master Plan and $10 million to build a 15-acre park downtown. This graphic from the city parks and recreation department further details how it would spend the money from the sales tax increase.
Samuel Ellis, owner of Rocktown River Outfitters, said at the July 30 meeting that he supports the tax because parks and recreation has a “huge impact on quality of life for Little Rock locals” and “a huge impact on bringing in tourism dollars.”
Infrastructure
A Flourish chart
The second-largest piece of the pie would go to public infrastructure — $137 million, or 21% of the total projected tax revenue. Of that, $80 million would fund “strategic infrastructure improvements,” according to the city’s project list. Another $48 million would go to street resurfacing and sidewalk construction, leaving $9 million for a few other smaller projects, such as trash collection equipment.
It’s not clear exactly what projects would be included under “strategic infrastructure improvements,” and other subcategories on the infrastructure project list are similarly vague. A city spokesperson didn’t respond to a request for more details. A newsletter sent by the mayor this week mentioned “street, sidewalk and drainage improvements” and “pothole repair.”
The city will look for feedback from the city board and community stakeholders about which projects to prioritize. The city also has an online form where residents can suggest infrastructure improvements.
Police and public safety
Public safety would get $113 million, or 17% of the total projected tax revenue. A sizable chunk of that total, $30 million, would fund the Little Rock Police Department’s real-time crime center, public safety technology and field operations.
Osyrus Bolly, a racial equity coordinator with the Arkansas Public Policy Panel and a co-founder of the Little Rock Freedom Fund, criticized the additional police funding in the tax proposal at the July 30 city board meeting. “Over-policing does not make our community safer,” he said.
Bolly urged the board to consider reallocating funds “from traditional law-enforcement activities to more community-based programs and services that address the root cause of crime and support public well-being,” a view that several other speakers at the July 30 meeting shared.
A Flourish chart
The tax hike would also put $50 million toward replacing public safety and code enforcement vehicles, some with electric vehicles. Another $15 million would fund “community oriented policing and mental health response teams.”
Currently, almost 58% of the city’s $331 million annual budget goes to public safety, a category that includes the police department, the fire department, code enforcement and other services.
The Port and other projects
The fourth “P” is the Port of Little Rock, a 4,000-acre industrial park near the airport that’s home to large corporations like Amazon and FedEx. The city has invested $30 million in the port over the last five years, mostly in the form of land acquisition and infrastructure to attract and retain businesses.
The tax proposal would send another $30 million to the port, at least on paper. Of that, $8 million dollars would go toward the creation of a megasite to incentivize development of a major industrial facility, Mayor Scott said at a Sept. 17 press conference.
The remaining $22 million would go toward development incentives in the form of land acquisition and infrastructure that could be used anywhere in Little Rock, despite being included under the “Port of Little Rock” category. Scott said at the Sept. 17 press conference that the $22 million will fund “utilities and infrastructure that, nine times out of 10, will be at the port, but also we need that leeway if there’s somewhere else within the city limits.”
Though the mayor has framed the tax proposal in terms of the “Four Ps,” it would also put $75.25 million toward projects that don’t fall into any of the four categories.
According to Scott’s weekly newsletter last week, the tax hike would dedicate $20 million to address homelessness. The funding would include support for the city’s new “micro-home village,” a new overnight emergency shelter, a coordinated-entry system for unhoused people, additional homeless engagement specialist positions within the city, and funding of eviction-prevention programs.
The proposal also allocates $10 million to affordable housing, which, according to the same memo from the mayor, would help fund land acquisition and construction costs for new affordable housing units, infrastructure in new development areas, rehab of existing properties and other services.
Additionally, the city’s information technology department would receive $12.25 million, which includes $750,000 in capital investment and $11.5 million in operating expenses. A spokesperson for the city didn’t respond to questions about what the IT money would be used for.
Some of the line items on the project list would be doled out over a decade. Others list an initial capital investment with an annual allocation for operating expenses, such as the Hindman Park renovation. It would entail a $14 million capital investment plus $100,000 a year.
The city board included the amounts in the project list in a July 30 nonbinding resolution stating the uses of the proposed tax increase.
Support, opposition, oversight
The city board voted on July 30 to send the proposal to voters. At the meeting, eight people spoke against the sales tax and six spoke in favor of it.
Some critics of the tax proposal argue that sales tax increases disproportionately affect low-income people, who spend a larger percentage of their paycheck on essential goods and services than high-income earners.
“I don’t think it’s fair to put the burden of the sales tax on the people who make the least yearly,” Osyrus Bolly said at the July 30 city board meeting.
Arkansas Community Organizations, a local grassroots group that advocates for renters’ rights and other progressive causes, announced its opposition to the tax increase on Tuesday. In 2021, Neil Sealy, the group’s executive director, served as treasurer for a group opposed to that year’s sales tax proposal.
The current proposal has also attracted opposition from the political right. A conservative-led group called Citizens for an Affordable Little Rock has formed to oppose the tax hike.
Another group has formed to advocate for passage of the tax: The Results for the Rock Committee, led by the CEO of a local steel manufacturer.
Though Little Rock is the biggest city in the state, it has the lowest sales tax rate of Arkansas’s 10 most populous cities. North Little Rock, Fayetteville, Rogers, Bentonville, Fort Smith and Springdale all have city tax rates of 2%, compared to Little Rock’s 1.125%. Pine Bluff’s sales tax rate is 1.625%.
If Little Rock voters pass the full 1-cent tax increase sought by the mayor and the board, though, the capital city would catapult to the top of the list.
Little Rock makes up for its relatively low sales tax rate with its 15.1 mill property tax rate, higher than most Arkansas cities.
If voters pass the tax increase on Nov. 5, both pieces would take effect on April 1, 2025. The 10-year, ⅝-cent tax would expire on March 31, 2035.
The city would also form an 11-member oversight committee to ensure tax revenue is spent properly. Mayor Scott would be in charge of appointing a member to represent each of Little Rock’s seven wards, along with three at-large members. Scott would serve as the 11th member. The mayor’s appointments would be subject to approval from the city board.
Any money collected in excess of the projected $650 million, or $65 million per year, would go into a $1 million contingency fund for emergencies. If the contingency fund were to fill up, further excess dollars would go into a “special city infrastructure fund,” Scott said at the July 16 meeting. Any allocation of these extra funds would be subject to approval from the city board and the to-be-established oversight committee.
The city’s website also contains information about the sales tax, including how the questions will appear on the ballot.