Voters in Benton last week rejected a 0.5% increase in the city sales tax for public safety efforts by a vote of 1,815 to 1,095.
The tax would have generated $2.4 million a year initially. The tax proposal called for the sales tax rate to drop to 0.25% in 2021.
Benton, the county seat of Saline County in central Arkansas, currently levies a city sales tax of 1.5% as well as a 1.5% tax on restaurant and hotel bills.
The tax hike was recommended by a citizens committee in consultation with Benton’s police and fire chiefs. The city’s population has grown to about 29,000 from 22,000 in 2000, but the number of public safety employees has lagged.
Benton’s top finance official said the city will attempt to cover an estimated $412,000 shortfall in its proposed 2010 budget of $10.7 million without dipping into its reserve fund.