City voters to decide tax issue
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City officials gave the green light to putting the question on the November ballot after meeting Tuesday to finalize necessary steps.
The idea has been pitched as a way to decrease property taxes for city residents if the higher tax is wholly retained by the city. Mayor Royce Davenport said he fully expects city officials to follow through with the promise to reduce property taxes if a higher sales tax is implemented.
“It wouldn’t make any sense for us not to,” said Davenport. “It would be plumb stupid – you can quote me on that – if we don’t.
“We’re basically giving the people the opportunity. It’s up to them. If they want more of the taxes collected off sales versus property, this is the way to do it.”
Davenport’s comments came after members of the Board of Mayor and Aldermen unanimously approved an ordinance on second reading stating a proposed 3/4-cent sales tax increase would not become effective until approved in an election. City voters can bump the local option sales tax from 2 percent to 2.75 percent.
Under numbers compiled by City Administrator Herb Llewellyn, officials estimated city property taxes could be reduced by more than $1 if replaced by new local option sales tax revenue of about $2 million a year.
Based on those numbers and the city retaining all of the proposed 3/4-cent increase, Llewellyn reported the city’s tax rate could be reduced from $1.94 to 78 cents. The 78-cent figure reflects a 10-cent cushion for sales tax fluctuation.
Davenport noted, as an example of those figures, a homeowner with property appraised at $50,000 who pays about $243 in property taxes per year would pay $98 under Llewellyn’s estimates, which Llewellyn said were based on actual sales tax received by the city.