DALLAS — A financial boost provided by a sales tax increase approved by Little Rock, Ark., voters in September will finance the city’s largest budget ever in 2012.
City manager Bruce Moore on Nov. 22 presented city directors with a $158.6 million proposed budget for 2012 that will add 100 jobs and boost spending by 18% from 2011.
For the first time in several years, directors won’t have to cut jobs or reduce projects to balance the budget, Moore said.
The city’s fiscal year begins Jan. 1.
Moore told directors the proposed budget begins to address the commitments the city made during the campaign for the tax increase.
Little Rock voters approved an increase in the sales tax rate in September to 1.5% from 0.5%.
The additional 1% is expected to generate $196 million for capital improvements over the next 10 years and $32 million a year for operations by 2015.
The 1.5% rate is expected to generate a total of $50.9 million in 2012, up from the $22.6 million collected in 2011 with the lower rate.
It will be the first time the rate has gone up since the tax was first levied in 1994. The new rate will go into effect Jan. 1, but the city will not receive the additional revenues until March.
A 0.375% portion of the tax dedicated to capital improvement projects will expire at the end of 2022 unless extended by voters.
The 0.625% portion of the additional tax for operations is a permanent levy.
The capital improvements portion of the tax will bring in almost $17 million in 2012, but the board will not allocate funds for specific projects until January.
Proposed capital spending includes $6.2 million for street repairs and $3.3 million to begin the process of developing a research park. Directors will vote on the 2012 budget by mid-December.
The $158 million 2012 budget includes funding for 57 new positions, including a zoo veterinarian and 15 maintenance workers for parks, and retains seven police officers and 18 firefighters paid through a grant that expires at the end of 2011.
Little Rock’s outstanding debt includes $87.5 million of general obligation bonds and $31.7 million of revenue bonds. The debt is rated Aa3 by Moody’s Investors Service and AA by Standard & Poor’s.
Little Rock voters in November 2003 authorized a property tax increase to support $70.6 million of GO bonds issued by the city a month later. Proceeds were used for street projects and public safety facilities.
