Nevada County Picayune and Gurdon Times Newspaper Archive

Rodgers Opposes Two Tax Amendments

State Representative Sandra Rodgers opposes the two property tax amendments being placed on the November General Election ballot.

She said neither one will be good for the public school systems in Arkansas, and will hurt the state in the long run.

Another thing, she said, is property tax is deductible on federal income tax while sales tax isn't. Under proposed Amendment 4, the property tax would be eliminated and sales tax increased by 1.875 percent to partially make up the difference in the loss of revenue.

Amendment 4 would abolish all property taxes, including improvement and service district taxes, as of Dec. 31, 2000, should this measure pass.

The amendment calls for the state sales tax to be increased by 1 7/8 percent to a total of 6.5 percent and this doesn't include city and county sales taxes currently on the books. The sales tax hike would begin Jan. 1, 2001, if it passes.

The proposal also calls for a 75 percent legislative approval and majority voter approval of any tax or fee increase, with the measures to be voted on in regularly scheduled statewide elections.

In addition, all personnel working for either the tax assessor or tax collector of all 75 counties in the state would be fired.

According to figures provided by Rodgers, the estimated sales tax for 2001 would be $625,800,000 for the state.

However, the projected loss of property tax revenue is $1.031 billion, which would mean a deficit of $405,200,000.

But, with the sales tax increase figured in, another $101.9 million would be added, but there would still be a shortfall of $303.3 million.

Currently, Rodgers said, 76 percent of the money raised in property tax is used to fund schools, with the other 24 percent going to cities and counties.

Under proposed Amendment 2, sponsored by the Arkansas Legislature, there would be property tax relief, with limits placed on the assessed value of real property as based on the current reappraisals going on across the state.

It would also provide a tax credit of up to $300 against ad valorem taxes on homesteads for the owners living in them.

This credit would exempt about the first $40,000 of the home's value, depending on where the structure is located.

There is also a 5 percent cap on increases in residential property tax following reappraisals, and a 10 percent cap on commercial increases.

Amendment 2 also freezes property values for Arkansans who are 65 or older or disabled, so their property taxes could no longer be increased.

Should this proposal pass, it would provide tax cuts of $180 million annually.

Rodgers said Amendment 4, though, would devastate the funding system for public schools and other essential services, such as police and fire protection along with libraries.

This, she said, means if Amendment 4 passes the money now going to rural fire departments would no longer be available, and city and county services could also be adversely affected.

The biggest loser, with the passage of either one, would be schools.

Under Amendment 4, the eventuality would be the creation of a fully state-funded educational system where the state would take all the money, divide it by the number of students in public schools and dole it out accordingly.

For many districts, this would reduce the amount their receive by about $440 per student.

Because of this some districts would wind up being consolidated no matter what the people wanted.

The language in the amendment doesn't address the bonded indebtedness of the state's school districts. The bonds are legal, binding contracts and are based on the collection of property taxes.

What could happen if Amendment 4 passes, is the state would be required to take over the educational system.

By law, school districts aren't required to furnish transportation to and from schools, so busing could be the first victim for budget cuts.

School standards would also be reduced and athletics would simply cease to exist because there would be no money to fund these programs.

In addition, it would mean an increase in the student-teacher ratio without the needed supplies to properly teach the classes.

Rodgers said the small schools would be the first to go because of the student-teacher ratio.