Little Rock Mayor Mark Stodola said the city will seek a 1% increase in the sales tax rate in a September election rather than the 1.25% that had been proposed.
The city currently levies a 0.5% tax, one of the lowest municipal sales taxes in Arkansas. The average city sales tax is 2.1%.
Stodola said last week that Little Rock voters were more likely to support the reduced request, with the revenue earmarked for public safety and street improvements.
Voters will be asked to approve two separate rate changes in the sales tax. The new rates would go into effect Jan. 1, 2012.
A permanent 0.625% increase, which is expected to generate $31.6 million a year by 2015, would be dedicated to general operations.
A 10-year, 0.375% increase in the sales tax would generate a total of $195 million of revenue for capital improvement projects.
Stodola had proposed a permanent 0.75% increase for operations and an eight-year, 0.5% increase for capital projects.
The original plan would have generated $204 million for capital projects and $307 million for operating expenses.
The new plan cuts $2.5 million from public safety capital construction and lowers the allocation for economic development to $38 million from $40 million.
Street repaving would be financed as a 10-year capital effort rather than as an annual operational cost. Parks spending will be reduced to $28 million from $40 million.
Stodola said the economic development efforts could include development of a research center or expansion of the city’s port on the Arkansas River.
Little Rock’s $115 million of outstanding debt includes $87.5 million of general obligation bonds and $31.7 million of revenue bonds.
The city’s debt is rated Aa3 by Moody’s Investors Service and AA by Standard & Poor’s.
