JONESBORO — A tax proposal to fund a multipurpose sports complex will be considered Tuesday by a Jonesboro City Council committee.
If endorsed by the finance and administration committee, the proposed ordinance would then be considered Oct. 4 by the full council.
The city’s Advertising and Promotion Commission voted Aug. 29 to request a 2 percent tax on the sale of prepared food in Jonesboro and to increase the already existing tax on hotel stays from 3 percent to 4 percent, the maximum allowed by state law.
The city’s finance department projects a 2 percent prepared food tax would generate $2.96 million per year.
During a presentation on Aug. 17, Danny Kapales, the city’s parks and recreation director, described facilities recently developed in cities in Arkansas and other states. One of the examples he cited was the $21.53 million River Center at Benton, a 89,000-square-foot multipurpose facility. It includes an aquatics center and space for four basketball courts and eight volleyball courts, Kapales said.
Today, Jonesboro operates one outdoor pool, formerly owned by the YMCA.
The commissioners indicated they plan to hire a consulting company to help determine the size and feasibility of a proposed project
Jonesboro voters in 2019 rejected a sales tax increase that would have funded a variety of recreational and quality-of-life projects. The specifics of the proposed projects weren’t revealed before the special election.
With the added revenue from the so-called hamburger tax, The Advertising and Promotion Commission envisioned potentially pledging revenue from the tax toward a bond issue.
A second option would be to borrow the funds from a local bank for up to five years, using the tax revenue as collateral. Andrew Guiltner, the city’s accountant said the city could borrow up to $28.5 million for a project at the 4 percent tax rate. With the bond issue, the city could raise $88.8 million over 15 years, according to information he presented.
Unlike general sales and use taxes, advertising and promotion taxes can be levied without voter approval.
However, voters can force a referendum with the signatures of 15 percent of the total number of voters in the last mayoral election. In 2020, 25,266 voters cast ballots in that election, according to information from the Craighead County Clerk’s office, so opponents of the tax would need at least 3,789 valid signatures to force an election.
The finance committee will meet at 4 p.m. in Municipal Center, 300 S. Church St.