Nevada County Picayune and Gurdon Times Newspaper Archive

Tax Issue Not Dead For Gurdon Mayor

It seems county officials were mistaken in saying it would be illegal for Gurdon to collect any part of the county sales tax monies.

Gurdon Mayor Rick Smith had Little Rock Attorney Mark Stodola research the situation. The findings show cities are allowed to receive their per capita share of countywide sales taxes, even if they also impose a city tax.

Stodola wrote: "Regarding the legal aspects, in order to retain the City's share of a countywide sales tax, the voters of the county will have to approve a new tax. Politically, to ensure passage of the new tax the City can propose the taxpayer's burden be lessened by one-fourth of a penny while allowing the cities of Clark County to access the three-fourths of a penny remaining in effect."

Because of a pending court case, he wrote, challenging imposition of a use tax without explicit voter approval, an election which clarifies the taxation will be beneficial to the county and cities.

Now, Smith said, the next step will be to meet with all parties involved as he has all the documentation needed for whichever route is taken on the issue.

"I hope the Clark County Quorum Court will work with us and refer it to the voters of Clark County," he said. "If not, we'll do an initiative and put it on the ballot."

County officials had claimed Gurdon wasn't eligible for any more tax monies because the city collects 2 cents in sales tax. Smith pointed out the city actually only has 1.5 cents in permanent taxes, with the other half-cent a temporary tax for a capitol improvement bond issue for the street and fire departments. This tax, he said, will expire in Oct. 2006.

"I feel all the governing bodies of the cities agree we're in an inequitable situation in Clark County, he said. "Even if Gurdon were unable to get its share, I'd move forward for the cities that could."

But, research and the law show Gurdon has the right to its share of the county sales tax money.

Smith wants the matter placed in the hands of the voters who originally passed the one-cent sales tax in 1988 to help bail the county out of its financial straits.

Times, Smith said, have changed and the situation isn't the same as it was in 1988.

Six members of the quorum court

live inside city limits, he added. "How can they say they represent the people who elected them when they turn their backs on this issue. Their duty is to all constituents."

Should the county not want to work with Gurdon and the other cities on the measure, Smith has a ballot title ready and will begin a petition drive to get it before the people.

He said the petition method will require getting 15 percent of registered voters who voted in the last presidential election to sign it. This amounts to about 800 signatures.

"If I felt this were detrimental to the county and the county road department," he said, "I wouldn't do it. We need to share as the statute provides, though the county may have to tighten its belt some."

The county's budget, Smith continued, proves it can afford to do better by the cities.

Gurdon's City Council, he said, was unable to give city employees a cost of living raise this year because of budgetary problems.

In addition, he said, Gurdon loses a lot of tax money when people shop outside of the city limits. If the money is spent in the county, though, Gurdon would get its share, should the proposed measure be approved.

"Cities need a tax tied to the economy of Clark County," Smith said. "Then everyone can flourish when money is spent in the county. It's just good business."

The history of the county sales tax began in 1988 when the unemployment rate was near 16 percent and the county was floundering financially.

Cities in the county agreed to help pass a sales tax and allow the county to get all of the funds.

At the time, the tax brought in about $1 million a year. In the ensuing years, the county's economy has improved greatly and now the tax brings in some $2 million annually.While the county is doing well, Smith said, the cities within it aren't. In fact, they need the money more than the county does at this point.

Normally, when a county sales tax is approved by voters, all cities within the county get a portion based on population.

Stodola said his research shows cities are not precluded from receipt of their share of a county-wide sales tax if they also impose a city sales tax, though it is agreed there is a limit to the number of taxes that may be imposed on a given taxpayer. But, he added, the city and county taxing authorities are cumulative and not mutually exclusive.

"Nowhere in Arkansas' laws does it state levying and collecting a municipal tax precludes a city from collection of its rightful per capita share of a countywide sales tax," he wrote.

"Where there are limits on the level of taxation imposed on an individual' taxpayer, there is no corresponding limitation restricting cities from taking advantage of the statutorily permitted taxes for both cities and counties."

Such taxes, he said, are limited to the collection of the first $2,500 of a sale, such as on a new car, or major purchases.

Smith, in writing to city officials throughout the county, said the issue, contrary to statements made by some, is not dead and the cities can collect their share of the county sales tax because the money belongs to the people of the county.

All city councils in Clark County passed resolutions seeking their portion of the tax.

The issue, he said, is about fair representation of tax dollars and the financial future of the cities.

"It also appears some of our county officials need to be reminded 64 percent of the people of Clark County do live inside a city or incorporated town and those people deserve representation by the CCQC," he said. "They also deserve to be provided with the facts, sheltered from propaganda and given a chance to voice their opinion about this issue in an election."