Nevada County Picayune and Gurdon Times Newspaper Archive

Tax Loss Would Hurt County

Clark County cannot afford to lose the revenue generated from property tax in any way.

Grady Runyan, Clark County Judge, said if proposed amendment 4 is approved by the voters in the November General Election, the effects to county operations will be serious.

Still, he said, Clark County, because of its industrial base, will do better than many other counties, especially some in eastern Arkansas.

The biggest problem with the removal of property tax, according to Runyan, is the domino effect it will have on jobs in the area.

First, under the terms of the proposition, those employed in the tax assessors and collectors office will be terminated as these jobs will be eliminated. This means the loss of jobs for these people, which translates into less tax money being paid in by them as they will adjust their budgets accordingly.

Or, they may leave the area, taking their families. This would mean the loss of state money for schools as well. Runyan said schools will also be badly affected by the proposal, should it be approved.

And, he continued, if the measure passes, in two years the county can come back and ask for a + cent sales tax. But, this tax must be passed by a majority of the voters, and can be repealed two years later.

The revenue shortfall, Runyan said, will affect schools, as well as the goods and services provide by cities and counties.

He called the idea nothing more than pyramiding of sales taxes, as this is the only way the state and counties will be able to generate the money necessary to run state, municipal and county governments, while also funding schools.

Everyone, though, won't feel the negative effects of the property tax loss. Runyan said big timber companies will actually come out better as they won't be paying property taxes, but can continue collecting money from the leasing of hunting land.

However, he said, proposition 4 isn't the only measure on the ballot which will affect the people of Arkansas. Proposed amendment 1, if approved, will allow cities and counties to enter into lease agreements for short term financing.

Currently, under constitutional law, this is illegal as cities and counties cannot obligate monies they don't have. This often causes problems when equipment, such as police cars, breaks down and needs to be replaced.

If amendment 1 is passed, Runyan said, then city and county governments can lease vehicles and equipment up to five years, paying the interest involved. Currently, it is illegal for cities and counties to pay interest on items purchased.

While amendment 1 would be good for city and county governments, amendment 4, Runyan said, would be equally destructive.

"It could devastate cities, counties and schools. It will ruin them," he said.

Members of the "silver-haired legislature" met with Gov. Mike Huckabee suggesting the property tax be dropped on those residents in Arkansas who are 70-years-old and above. This, he said, will relieve some of the burden from then.

On the other hand, if the property tax is simply dropped and no one pays, Runyan said, the money lost will have to be replaced from somewhere else. Under proposition 4, this would be in the request of sales taxes from the people.

In Clark County, property tax generated comes to $7,688,763.62 annually, while the sales tax generated each year is $1,834,747.62. Without the property tax, the county would lose the majority of its budget.

This would also mean the loss of repair to many roads and bridges in a timely manner, though part of the 7/8 percent tax the General Assembly would be dedicated to the road and bridge budget for counties.

Runyan said the loss of more than $4 million from the county budget would result in across the board cuts, while several schools, currently financially strapped, may have to close.

"We're lucky in Clark County," he said. "It took the combined effort of city and county government working together, but our industrial base is good. Our tax base is good."

Runyan is available to speak on the topic of amendment 4 to any school or civic groups.

A letter was sent from Runyan's office to all county employees on the topic of this proposal, stating if it passes the county may have to cut back on services provided to county residents as well as the number of employees working for the county.