This is not a good year for elections. Petition gathering will be difficult. And seeking a sales tax increase, as Little Rock is contemplating is not well-timed for an economic crisis.
A regressive sales tax isn’t an easy sell at any time, with an impact heaviest on those least able to pay. The additional burden on foundering businesses is another consideration. These “pennies” add up. A 1 percent step up in the city sales tax is a 66 percent increase in the existing city sales tax rate of 1.5 percent. With other sales taxes it would add up to an additional dollar, or $12 in local and state taxes on $100 spent in a restaurant and $14 on every $100 hotel room.
The city has needs, no doubt, and the mayor’s proposed ground-breaking investment in early education is an overdue city recognition of the bedrock of great cities.
But there are two sides of the balance sheet.
This is but one point in an essay on the sales tax question written by Baker Kurrus, the lawyer and businessman who was decisively beaten in a runoff for the mayor’s job by Frank Scott Jr.
Kurrus’ analytical nature was an appealing part of his candidacy (and in his short tenure as Little Rock school superintendent). His no-bull approach wasn’t politically attractive.
But before you dismiss this effort as sour grapes, I urge you to read what he has to say. Reject the lengthy treatise after reading if you will and vote for the sales tax should it make the ballot. But don’t dismiss it as political posturing. There are facts and figures here worthy of address by tax advocates. It details existing high tax rates — property, franchise and sales. It comments on seemingly disproportionate increases in overall city personnel costs (38 percent in two years for the mayor’s office, he says, not counting the new four-man police security detail). And don’t forget that the city tax adds to restaurant and alcohol and hotel taxes that have been used to shore up various city endeavors. He mentions, too, the lack of sufficient city board attention to the policymaking that guides executive decisions.
Kurrus doesn’t directly oppose the sales tax increase, but he concludes:
When Little Rock’s total tax burden is examined, it is clear that no sales tax increase should be predicated on the idea that Little Rock has low tax rates.
No matter whether a general sales tax increase is needed or not, the fundamental question should always be whether an organization is spending its existing resources wisely. If a sales tax increase is to have broad public support, the proponents need to demonstrate that current city revenues are being spent wisely, and that a tax rate increase is absolutely necessary.
Check it out.