A $51 million community center with basketball courts and an amphitheater is under construction in Searcy thanks to a sales tax increase voters approved last year.
Meanwhile, Conway’s plans to build a concert venue and a lakeside boardwalk have been put on hold after voters partially rejected a sales tax increase there last month.
These are two of the recent outcomes rendered by Arkansas voters in local sales tax elections, which voters have approved 72% of the time since the state loosened the reins on such elections in 1981, according to historical data.
Today, 349 of Arkansas’ 500 incorporated cities and towns levy a sales tax, ranging from 4.5% in Greenland (Washington County) to 0.5% in Hampton (Calhoun County). And all of Arkansas’ counties, except Monroe County, levy a countywide sales tax. Some county taxes are levied exclusively for county use and others are divided among the county and local municipalities.
During the past 44 years, Arkansas cities and counties have held more than 1,000 sales tax elections, mostly to increase the rates. And Arkansas voters have obliged most of the time, including 60 out of 76 times last year, the most since 1981.
Earlier this month, a poll by Pew Research found that Americans’ trust in the federal government is near an all-time low at just 17%. But the election outcomes suggest Arkansas voters view their local governments differently.
Mark Hayes, the executive director of the Arkansas Municipal League, said voters can see needs in their communities clearly, whether it’s a failing water system or a need for additional police. He also thinks familiarity with local officials matters.
“I think voters still feel relatively comfortable with local government because they see city officials at football games and grocery stores and churches and all those kinds of things,” he said. “It’s an easier conversation to have about what’s going on in your city and there’s a level of trust, I think, that exists there and I hope continues.”
‘My Searcy’ Plan
In March 2024, Searcy voters approved a pair of tax measures to support a $93 million slate of capital projects that would be paid for by a city bond issue.
More than 60% of Searcy voters approved a measure to temporarily increase the city’s sales tax from 1.5% to 2% to generate an estimated $4.5 million a year. The sales tax increase would end when the bonds are paid off, which Searcy Mayor Mat Faulkner expects to take less than 20 years.
In a separate vote on the same ballot, more than 61% of Searcy voters approved dedicating $1 million a year from the city’s existing advertising and promotions tax toward the bonds. The city is also paying $2.5 million a year from the city coffers to support the projects.
Searcy’s sales tax increase was the culmination of a project that began in 2022 when the city worked with Little Rock planning firm Crafton Tull to create a series of master plans for the city’s parks, infrastructure and trail network. The city held public meetings, conducted online surveys and formed steering committees.
“Then the next question was ‘How do you fund these things?’” Faulkner said.
The city chose to dedicate city funding as well as to ask the voters for a temporary sales tax increase. The tax campaign was built on the success of the “My Searcy” initiative from 2019 when the city won a national contest that resulted in marketing support and property rehabilitation for several local businesses.
Faulkner thinks the community engagement made the difference in winning support for the ballot measure. “The public engagement portion really was the foundation and the crux of having a successful effort, because that way you start off by listening to the needs and wants of the community.”
The sales tax measure requires that some of the bond projects be completed within three years of the election and those projects are underway.
The city is working with Little Rock architecture firm Polk Stanley Wilcox to design the community center, which is expected to open in 2027.
Other projects funded by the tax include a water park, trails, soccer fields, baseball and softball fields and improvements to Berryhill Park, the city’s central park.
“The community is just ready to see these things completed where they can start using them,” Faulkner said.
Split Decision
Conway voters delivered a split decision when they went to the polls last month.
Conway officials placed six measures on the November ballot, including two measures to permanently increase the city’s sales tax rate by 3/8 of a cent to support public safety capital projects as well as street and drainage projects.
Voters approved these two measures after a previous sales tax sunsetted two years ago and the city lost some of its ability to perform street maintenance. The new tax is for capital projects, but Jamie Gates, executive vice president of the Conway Area Chamber of Commerce, said it will provide relief to the city’s general fund.
The other four questions focused on quality-of-life amenities and they failed by a wide margin.
The projects would have raised the sales tax by another 3/8 of a cent to back a bond issue. The rejected projects included construction of a music venue, renovation of a downtown theater, construction of a boardwalk along Lake Conway and construction of a convention center.
The tax increase for the four bond-related projects would have expired when the bonds were paid off, which Gates estimated would be in about 12-15 years.
A communitywide strategic vision project in 2020 found that residents believed addressing a lack of arts and culture amenities was a priority, which drove the quality-of-life portion of the sales tax initiative, Gates said.
Gates said the bar is high for passing any sales tax, since there are always some voters who will oppose it and there’s a high burden of proof to pass one. Gates also cited economic uncertainty and affordability concerns as impacting voters’ interest in the measures.
“It’s as simple as when people are worried about their current circumstances, they are less interested in thinking about the future or that planning horizon becomes a lot shorter,” he said.
Gates believes voters addressed the most pressing needs confronting the city but said the quality-of-life amenities are still important for growing the city’s economy. The projects have the same merit in his eyes as they did before voters rejected them. He said similar projects in other cities typically have substantial public support but believes they can still become a reality.
“The concepts still exist and we clearly think the market demand is here, because market demand is something very different than political appetite.”
Voter Support
In 2023, the state Legislature changed the law, limiting the dates when cities and counties can hold the elections. There are two dates each year and, in even-numbered years, the dates coincide with primary and general elections.
Jeremy Horpedahl, an economics professor at the University of Central Arkansas, has found that the local measures pass at a lower rate when they are held during a general election, but even then, they still pass about half the time.
Local measures passed at a rate of 79% last year, but Horpedahl said it’s too early to make a determination on how the change in dates has impacted the elections.
Shep Russell, an attorney at Friday Eldredge & Clark in Little Rock, has worked in public finance for 47 years and has worked with hundreds of cities and counties. He believes voters aren’t going to support a project they don’t like regardless of the time it’s on the ballot.
“If you had something they didn’t want, boy, you weren’t going to pass it anyway,” he said.
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