The Little Rock, Ark., Board of Directors approved a plan last week that would allocate revenues from a sales tax increase toward capital projects in the city.
The proposal dedicates 90% of the funding equally among the seven wards, with 10% reserved for an emergency fund.
Voters in September approved a 1% increase in the city’s sales tax rate that went into effect Jan. 1.
The city now collects a 1.5% sales tax along with the state’s 6% tax and Pulaski County’s 1% tax.
The $65.5 million expected from the capital portion of the tax will give each of the nine wards approximately $8.4 million for capital work over a nine-year period that will kick off in fiscal year 2013.
The city’s Board of Directors had already approved $5 million of city-wide drainage and street projects for fiscal 2012.
The capital projects are based on three three-year funding cycles.
The quick-action fund, which will be dedicated to emergency projects or projects that cross ward boundaries, is expected to receive $2 million over the first three years and $2.4 million in the final three years.
A 0.375% portion of the sales tax increase, 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. It is expected to generate $32 million a year by 2015.
The 10-year capital improvement portion of the tax is expected to generate a total of $67.5 million for streets and drainage projects, $17 million for parks projects, and $38 million for economic development efforts that includes a $22 million research park and $10 million of upgrades to the city’s port on the Arkansas River.
The city will also build two new fire stations and replace its 27-year-old emergency radio system.
Little Rock’s outstanding debt profile 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.
