Nevada County Picayune and Gurdon Times Newspaper Archive

County Sues Arkadelphia (cont)

the suit, he said, the city council would have to vote on what to do with the funds. This would amount to about $190,000 annually.

Smith said it wouldn't be fair to pull all of the money from the county, and he doesn't want to see the county become financially strapped.

However, he said, it would be up to each individual council of every incorporated city within the county to decide, should Arkadelphia prevail.

When the Arkansas General Assembly granted counties the constitutional right to pass and collect sales tax in 1995, suits were filed claiming this type of taxation was illegal.

The Arkansas Supreme Court decided it was legal for counties to levy taxes, and upheld the Legislature's decision.

During the time of these suits, Clark County was sued by Sam Horton.

Former City Manager Steve Beck signed an affidavit stating the city of Arkadelphia receives a percentage of proceeds from the state treasurer based upon the 1 cent sales and use tax for the county.

In the affidavit, Beck stated the cit's portion is immediately turned over to the county treasurer. The tax, the affidavit states, was enacted by a countywide election, with a percentage returned to the city, and then being turned over to the county.

Should Arkadelphia retain the tax money in question, it would amount to $77,000 per month. This, according to an affidavit from Runyan, would cause immediate harm to the county as the county would be prevented from providing services as budgeted for, as well as putting the county in serious financial harm because of its reliance on these monies.

Resolution R-98-2, as passed by the Arkadelphia board of directors, states the county first came to the city in 1985 asking the city to pass its share of the county's sales tax back to the county as the county was in dire financial condition at the time.

This the city did, with representatives from the board going to the county on Feb. 2, 1998 asking the county to return the favor because the city was in need of money for basic street improvement, with the streets being in the city, which is located in the county.

The resolution states city officials went before the quorum court on Feb. 10, and were turned down in their request for funding, with the county refusing to reciprocate as the city had done originally.

"...the City did notify the County of its intention to use the City's share of the sales tax in full compliance of the 1988 referendum approved by the voters of Clark County, of which Arkadelphia is an integral part, for the purpose of dedicating these funds for street improvements only, as specified and directed by the ballot of that vote."

Runyan said this issue could well go to the Arkansas Supreme Court before being settled.

McAlister, when called about the matter, said the city's attorney, Ed McCorkle, had placed him under a gag order, telling him to say nothing.

McCorkle could not be reached for comment as of press time.