Where the Candidates Stand on Taxes

In an October 12 article, Warren Watkins reported on his interviews with "two candidates in the race for Searcy alderman, Ward 1 Position 2" for the Daily Citizen (TDC). In their interviews, the two candidates answered questions regarding city tax revenues.

Alderman Mary Ann Arnett on Taxes

"TDC: You’ve listed street improvements done during your years on the council. What plans do you have for future improvements?
Arnett: I want to fix all of the streets, roads and infrastructure, but it takes money and a lot of it. Searcy has done a lot in the last few years and it lowers the reserve fund, which is very healthy right now. The biggest project we’ve done is on Benton Street at Sidney Deener Elementary School. We can’t afford to spend over $1 million every two years without another source of revenue.

TDC: What source of revenue is available?
Arnett: Whatever the people would be willing to pay for their streets. Sales taxes were down a little but they’re coming back now. If sales tax revenue would continue to go up we might have more revenue from that source. It’s just expensive to fix streets."

On her Web site, Alderman Arnett elaborates on her statements to the Daily Citizen:

"When money comes out of the general fund, reserves go down. We cannot continue to use general revenue money for roads alone. So we need another source of revenue to resurface roads."

"The last tax for the city was in 1994 and I believe it was a sunset tax to rebuild the fire department that burned. Sales tax revenue is down. If we can’t cut back expenses then we could cut back on services. We will have to make choices."

Alderman Arnett has the history wrong (see our Searcy Tax Time Line below), but her message to voters is clear. She is hinting at higher taxes as the way to pay for the things she wants to do for the city.

Nicholas Horton on Taxes

"TDC: You said we could combine infrastructure improvements with low taxes? Where would the revenue come from, then?
Horton: We just assume we have to raise taxes to increase revenues but in reality economic history shows that if we keep taxes low and expand the tax base then we will see an increase in revenues. So if we can foster some economic growth in the city and continue the residential growth we’ve seen we’ll have more people paying in and we’ll have more people spending their money and that will increase revenues.

TDC: Will supply-side economics work on a local level?
Horton:: Absolutely. Why wouldn’t it? If we diversify the types of industry we have and expand the retail industry then some of the spending we see going to Little Rock and Conway we’d see at stores here and the revenue would increase"

On his Web site, Mr. Horton suggests "opening a dialogue & working with state and county leaders," fostering a "pro-growth tax and regulatory environment," cutting "waste in the city budget," to build up the city's finances. He has also signed a taxpayer protection pledge. Mr. Horton is committing himself to look for ways to pay for the things we want the city to do without raising our taxes.

Searcy Tax Time Line
The following time line was compiled using information from a June 21, 2007 article in the Arkansas Democrat-Gazette.

• 1989 - "Searcy does receive a percentage of White County's 1 percent sales-tax issue that was passed in 1989."
• 1994 - "Searcy's first sales-tax issue was in 1994 at 0.5 percent, which removed the five mills of City General Property Tax and is still in place for general improvements and operation of the city. Residents pay only 0.8 of a mill of property tax, which is designated to police and fire pension and 1.2 mills of road taxes. All other property taxes paid in the city limits go toward county services and public schools."
• 2005-2006 - "a ninemonth, short-term, 1 percent sales tax after the Central Fire Station and Courts building burned;" "It raised $3.7 million, which is being used to construct the new station. It also went to purchase a new fire engine and furnishings for the station."
• 2007 - Mayor Belinda LaForce proposed a permanent 1 percent sales tax, which would have tripled the city sales tax from .5 to 1.5 percent; the City Council referred this tax to the people, and in the 2007 special election it was rejected by the voters
• 2009-2010 - In May 2009, five aldermen (Arnett, Dixon, Sterling, English, and Chalenburg) passed an A&P tax of 1 percent on all prepared food and 3 percent on all short-term (less than 30 days) rental of accommodations; after collecting the tax illegally for six months, the tax was rejected by voters in a referendum election in April 2010