Leader Blues

Monday, July 16, 2007

TOP STORY >>Idea of hamburger tax appetizing

IN SHORT: Commission, aldermen and public will discuss Monday a two-cent levy to fund marketing and promotion plans for the city.

Leader staff writer

A proposed two-cent tax on prepared foods, also known as a hamburger tax, tops the Jacksonville Advertising and Promotions agenda for its 6:30 p.m. Monday meeting at city hall.

Monday’s meeting will also include city aldermen who plan to vote on the tax idea at their Thursday night meeting. The council has enough votes at the moment to pass the tax.

Residents are also invited to give input at Monday’s meeting.

Advertising and promotion commissioners have been working on the tax idea for about nine months and sent the idea to the city council for discussion at its July 5 meeting. Aldermen split between instant approval of the tax and giving residents more time to give them input.

The proposed two-cent tax would, according to state Department of Finance and Administration figures, raise about $550,000 a year. That would be added to the city’s advertising and promotion commission’s current budget of $88,000 a year —garnered from a two-cent hotel room tax—to promote and market the city.

Cabot, to the north, and Sherwood to the south both have a prepared food tax in place to help fund their advertising promotion commissions.

Sherwood has had a two-cent tax for about 15 years that the residents voted in. By law, cities have the option of approving up to two cents of a prepared food tax just by council vote, or by a vote of the residents.

Sherwood’s tax brings in about $450,000 a year. The first $300,000 ($25,000 a month) of that goes to help maintain the city’s recreation center and $75,000 goes to the commission’s holiday display of lights called the Enchanted Forest.

“The money covers advertising, the cost of displays, upkeep and the electric bill,” said Cheryl Ferguson, the city’s advertising and promotion commission. An additional $19,000 is budgeted to the parks department for events, awards, tournament bids and advertising, $11,500 in salaries and $45,900 for contingencies.

Cabot has had 1.5 percent prepared food tax since 1993, voted in by council action. Later residents voted to dedicate a third of that tax to paying off the bonds needed to build the city’s community center.

Cabot’s tax generates about $514,000 a year.
Slightly more than $204,000 is automatically earmarked for community center payments. About $130,000 goes to the city’s parks and recreation department. About half for maintenance, $30,000 to add lights to city soccer fields and $27,000 for ball-field fencing.

The chamber of commerce gets $40,000 a year to help promote the city, and $25,000 is budgeted for improvements to the Cabot football field. Other activities supported, in whole or part, by A and P money include Cabot City Beautiful, Cabot High School Junior ROTC, the July 4th celebration and the Avenue of Dreams.

Jacksonville Alderman Marshall Smith, who chairs the advertising and promotion commission, told the council at its last meeting, “The tourism study we commissioned last year recommended the tax as a way to raise more money to promote the city. If we don’t do it, we’re not showing much faith in the study.”

The commission has suggested that it use half the $550,000 projected income, or $275,000, for professional promotion and marketing campaigns to bring people to Jacksonville and its attractions.

About 30 percent of the tax, or $163,000, will be given to the city’s parks and recreation department to be used for park improvements and operations. The commission has slated $20,000 for the patriotic spectacular show to increase promotion of the activity and allow for a bigger fireworks show.

The Reed’s Bridge Battlefield group will get $12,000 to buy Civil War displays and make other improvements to the site to bring in tourists. The Jacksonville Museum of Military History will get $22,000 of the new money to help get the necessary permission to display static aircraft and to help toward maintenance of that aircraft display. The commission plans to set aside $30,000 of the tax for projects, requests and ideas that come up during the year that are not already budgeted.

Another $18,000 will be used for help pay for the staff to coordinate and collect the tax data, staff training and educating businesses and the public on what types of items are taxable. Alderman Gary Fletcher voiced concerns about the new tax at the council meeting. “We don’t want this to look like we have a pool of money that we are divvying up among friends and favorite projects,” he said.

Jacksonville Alderman Terry Sansing didn’t like the timing. “The state just cut three cents on grocery tax and here we are wanting to add two cents on prepared foods,” he said, and a UALR task force has just recommended that the county ask residents for a 0.25-percent tax to fund jail operations.