Nevada County Picayune and Gurdon Times Newspaper Archive

Judge, Mayor agree Amendment 3 is bad

Proposed Amendment 3 is being called one of the worst pieces to ever be brought before the voters of Arkansas.

Nevada County Judge James Roy Brown and Prescott Mayor Howard Taylor agree is this issue passes it will be devastating for Prescott and Nevada County, along with the rest of Arkansas.

Under Amendment 3 the sales tax would be removed from food and medicine.

While this sounds good on the front end, the proposal included no method of replacing the lost revenue to the state. This would amount to more than $700 million annually.

Taylor attended a meeting of the executive committee for the Arkansas Municipal League recently, with the consensus being for all cities in the state to oppose this proposal.

While no one, according to Taylor and Brown, is sure exactly how much revenue the city and county would lose, both agree with the preliminary numbers presented  a 30 percent reduction of money coming in from sales tax.

Taylor said this would mean cuts in the Prescott Police Department, the Prescott Fire Department, garbage pickup and street repair.

For the county, Brown said, it would mean the Nevada County Quorum Court would no longer be able to help such organizations as the Senior Adult Center, the Nevada County Fair Association and Nevada County Rescue Unit.

For the City of Prescott, the 30 percent loss of revenue would reduce its budget from $8 million a year to $5.6 million. The county would drop from $1 million to $700,000 annually for its county general fund.

Taylor said bond issues could be in jeopardy should Amendment 3 get on the ballot and pass. This would force some cities may to default on their bonds, which would, in turn, negatively affect a community's credit rating.

The same would hold true for many counties in the state.

Part of the problem with the Amendment, Taylor said, is there is no real definition of food. Under the proposal, food is described as anything that could be purchased with food stamps as of 2001.

Brown and Taylor agree the issue couldn't have come at a worse time as cities and counties around the state are preparing budgets for 2003.

According to Taylor, the city has been advised to make two budgets  one based on a 30 percent cut in revenue and the other based on anticipated growth.

Brown said the county would lose about $80,000 a year from solid waste because of the one-cent sales tax funding the program.

This, he said, would result in the county having to charge a fee to pick up residential garbage.

The end result, Brown said, would be the county not helping fund the other agencies it currently lends financial assistance to, in an attempt to avoid charging a garbage fee.

"I hate to say this," he said, "but people keep trying to do away with taxes. We'd need another tax to make up for the loss of this one, and for a year or two there wouldn't be any money and everyone would suffer severely."

Under the Arkansas Constitution, counties must have elected officials and a jail. If anyone is being kept in jail, the county must provide for a jailer.

This isn't the same for cities, Brown said. Cities don't have to have any elected officials under the Constitution.

There are 50 employees with the city. Taylor said if Amendment 3 passes 15 would be let go because of budget reduction.

"We're (the state) looking at a vast reduction of services," Taylor said. "Teacher salaries, medical needs for children, nursing home programs and mental health programs would all suffer and prison building would stop.

"The state would have to raise the income tax and/or property tax to make up the difference. People need to know what they'd lose if this passes. They need to talk to their families and friends on how bad this really is."

According to Brown, the Senior Citizen's Center uses the money it receives from the county to obtain federal matching grants. There would be no more grants if the county is unable to help fund the center.

Additionally, he said, Nevada County is maxed out on its property tax millage. This would mean a reduction if county services, including road and bridge repair if Amendment 3 passes.

"We're not able to raise taxes any more," Brown said. "This is not the time to start cutting services. We're trying to build Arkansas economically."

Brown also pointed out the Lake View lawsuit hasn't been settled in courts yet. The outcome of this case could cost the state anywhere between $700 million and $1 billion. Arkansas would be required to find funds to pay off this suit, while dealing with the loss of more than $700 million a year if Amendment 3 passes, he said.

Estimated sales tax paid in from groceries in Nevada County, Brown said, are $102,000, with the county getting $50,000 back from the state.

These figures, he said, came from the state treasurer's office and are based on food consumed at home.

Hempstead County pays in $510,000, and gets $362,000 back. Clark County pays in $258,000 and gets $94,000. Howard County pays in $396,000 and receives $254,000.

Taylor and Brown said these figures don't include the hamburger tax or soft drink tax, both of which would be eliminated under Amendment 3.

Amendment 3 is sponsored by the Arkansas Libertarian Party, and doesn't include any method of replacing the lost revenue.

It is being opposed by a group calling itself APPLE  Arkansans to Protect Police, Libraries, Education and Services.

According to APPLE, statewide losses include the following:

$117.6 million to public schools, with the average loss for elementary schools being $105,205;

The Arkansas Children's Hospital would lose $6 million, which would reduce the care the ACH is able to provide;

Higher education would lose at least $38.6 million, possibly more;

The Department of Human Services would have to eliminate programs to save the $168 million it would lose; Medicaid would lose $126 million, but as this program receives a 3:1 federal match, the end result would mean the loss would actually be $561 million;

All state services would be placed in jeopardy, as would the state's credit rating; and

Arkansas's economy would be harmed because of the budget cuts to schools and other programs.

According to APPLE, what low-income people save on taxes up front would prove to be more harmful for them in the long run.

This would be seen in the reduction or elimination of programs specifically for low-income families.

In addition, according to APPLE, states surrounding Arkansas, with the exception of oil-rich Texas, have taxes on food. These states include Tennessee, Missouri, Oklahoma, Mississippi and Louisiana.

According to the Libertarian Party's "fact sheet", the organization recognizes the right of any individual to challenge the payment of taxes on moral, religious, legal or constitutional grounds.

It also opposes all personal and corporate income taxes, including the capital gains tax.

The Libertarians support an eventual repeal of all taxes in the nation, and demand amnesty for those convicted of, or stand accused of tax resistance.

"In the current fiscal crisis of states and municipalities, default is preferable to raising taxes or perpetual refinancing of growing public debt." This was obtained from the National Libertarian Party's web site.