In discussions about a two mil increase in property taxes to benefit the Fort Smith Public Library, much attention has been paid to the impact a tax increase could have on homeowners. But property tax records indicate that businesses operating in Fort Smith could be on the hook for a large portion of the estimated $2.8 million raised through the tax increase.
Early voting on the library tax begins Tuesday (Aug. 5) and continues weekdays through Monday (Aug. 11) in room G-8 of the Sebastian County Courthouse in Fort Smith.
Voters casting ballots in the special election on Aug. 12 will vote in one of four polling sites:
• Ward 1: Creekmore Park;
• Ward 2: Windsor Drive Library;
• Ward 3: Southside Senior Center; and
• Ward 4: East Side Baptist Church.
Property tax figures and projections based on assessed property values were provided to The City Wire by the Sebastian County Assessor's office. They indicate that the top 22 line items would make up 12% of the increase in taxes if the millage rate supporting the library increases from one mil to two mils.
It should be noted that the line items may not include all parcels or business personal property owned by the companies listed in the report. For example, Baldor Electric Company confirmed that property tax information listed in the report included only one parcel from its 2013 tax bill while excluding other parcels owned by the company.
The top company listed in the report is Fort Smith HMA LLC, with a value of $17.841 million. At the current one mil rate, HMA's property tax benefitting the library would only stand at $17,841. If the millage increase passes Aug. 12, the company's tax obligation for increases to $53,523, a difference of $35,682.
Nearly tied for the same increase is Gerber Products Company, which would see its taxes on an assessed value of $16.79 million increase from $16,790 per year to $50,370, an increase of $33,580.
Third on the list are seven properties owned by Wal-Mart, including the Sam's Club location on Rogers Avenue. The total combined assessed value of the properties stands at $14.213 million with a tax obligation on one mil of $14,213. If the millage for the library passes, the total Wal-Mart would owe in taxes increases to $42,640, a difference of $28,427.
For just the three businesses listed as having the largest tax obligation, the increase combined would equal $97,689. The figure for the three is 3.48% of the $2.8 million library Executive Director Jennifer Goodson has said would be raised annually by tripling the millage rate. Just the 22 line item payments provided by the Assessor’s office would account for 12% – $336,170 – of the total, an indication of how much of the property tax bill is paid by business operations with property and certain fixed assets in Fort Smith. Businesses on the list also include Gerber, O.K. Foods, Golden Living, Sparks Health System, Mercy-Fort Smith, Mars Petcare and ArcBest Corp.
‘A UNIVERSAL THING’
Asked before a town hall event Monday evening (Aug. 4) touting the library's proposed tax increase for reaction to the impact a millage increase could have on businesses, Goodson said she "was not equipped to comment on that." Asked whether the library's board of trustees had considered the impact a tax increase could have on businesses in addition to residences, Goodson said, "We knew that the business community would be impacted."
"We're just talking about the future of the community. That's what our focus is. And so if a business and/or individuals believe that this plan is something that is good for the future of Fort Smith, then they make that decision. We don't make a distinction about business perspective versus individuals, people who have a lot of money or people who have a little money. The library is a universal thing in our community, so we've been targeting a variety of folks not a particular segment in everything we've done."
In presentations to the public, Goodson has said the tax impact on a $100,000 home would amount to about $5 per month, or $60 per year, in total taxes paid to the benefit of the library. Goodson confirmed Monday that the taxes would also go up on personal property, such as cars and boats. Information from the Assessor’s office indicates the average tax bill in Fort Smith will rise $72.86 if the millage increase is approved.
NOT A SHARED VISION
Goodson's remarks regarding the fiscal impact a tax increase would have on the city's biggest taxpayers came before a town hall meeting of about 25 individuals which saw most residents who chose to speak voicing opposition to the millage increase. Resident Jay Wiechert was among those who spoke out against the increase.
"We have one mil. You're wanting three mils. That's greed. Shame on you. Shame on you. How can you go from one mil to three mils and keep a straight face?"
Goodson referred to her presentation of nearly an hour Monday night, interviews and information available online as proof that the library board had a plan for the money should voters approve the tax hike.
"And if that is not your vision for the library and its impact in the community, then I certainly respect that. But it is the vision of the board, staff and a number of our stakeholders,” Goodson explained.
Fort Smith resident Jerry Fleming also spoke and had presented town hall attendees calculations, which showed the library had increased its receipt of tax proceeds by 6,397.22% since 1958. The library's one mil property tax rate was passed in 1957. Fowler's chart — formed using data provided to him by the library and presented to attendees Monday — shows the library collected $36,000 from one mil in property taxes in 1958. The total is estimated to be $1.413 million from the one mil in 2014.
The total increase in operating budget included 6% provided to the library from the city's 1% of the county sales tax proceeds. The distribution to the library began in 1995 with $596,000 and is expected to increase to an estimated total of $926,000 this year.
The total from both taxes are estimated to ring in at $2.339 million this year, or 64 times more revenue generated in 2014 than 1958, according to Fowler.
Goodson responded by noting that inflation had increased from the 1950s to present day, noting the rise in the price of an automobile which she said was priced at $2,700 in the 1950s. She also said the library provides more services than in 1958 and has four branches, versus one when the current millage rate was approved by voters. Goodson's response did not persuade Fowler, who said he was not opposed to all proposals included in the library's plan but said the proposed increase was simply too much.
"If you multiply that (the quoted price of a car in 1958) times 64, a car today would be $172,800. A house, $20,000 times 64 is $1.28 million. Bacon, 39 cents a pound in 1958 times 64, we'd be paying $25 for bacon. The only thing that got a 64 times increase that I can find is the library. Now I really don't think that's material. I've said that all along. I just wish you'd stop that being your major theme and that is your major theme."
Resident Don Dickey said the proposed spending plan Goodson and the trustee board have formed for the first year the tax revenues are available (2016) does not address future ongoing budgets, noting that as a business owner he must present business projects and budgets with projections for five years out before he can get a loan from a bank.
Goodson called the proposed budget "a flexible document, not a rulebook. We've got a good first year, but we need to see what we learn and what we experience between now and 2017."
Fowler compared Goodson's response to that of former House Speaker Nancy Pelosi, who famously said of the Affordable Care Act in 2010 before it was voted on in the House: "(W)e have to pass the bill so that you can find out what is in it, away from the fog of the controversy."