DALLAS — Little Rock, Ark., voters Tuesday approved a 15-year extension of an existing property tax to support $105 million of general obligation bonds.
The final results from the Pulaski County election department show the two measures passed with more than 76% in favor. Turnout for the special election was light, with ballots cast by 6,213 of the city’s 115,000 registered voters.
The two-part ballot measure allocated 70% of the revenues from the property tax to be used for street projects and 30% for drainage.
Without the extension, the capital improvements tax would have expired at the end of 2012. The extension includes a drop in the tax rate to 3 mills from the current 3.3 mills.
At a victory party Tuesday night after the election, Mayor Mark Stodola said voters understood the need for well-maintained streets and an effective drainage infrastructure.
“I’m pleased that we are focused on the basics that make a city great and that an overwhelming amount of voters agreed,” Stodola said. “More than 76% [in favor] is a tremendous victory and a great show of support.”
He suggested the bond election in his state of the city speech in March.
Stodola said city officials must now determine if the 15-year bonds should be sold in a single tranche or over several years.
Little Rock expects to earn $5 million to $7 million in interest from the proceeds, depending on whether there is one sale or several. Little Rock’s GO debt is rated AA by Standard & Poor’s and Aa2 by Moody’s Investors Service.
Proceeds will provide $13.5 million for projects in each of Little Rock’s seven political wards. The city will set aside $10.5 million of the proceeds for larger projects involving more than one ward and emergency needs.
Revenues from the existing tax currently support $72.8 million of 15-year GO bonds issued in 2004. Unanticipated revenues due to growth in property values and population will allow the city to make the final debt-service payment on those bonds this year rather than in 2019, Stodola said.
The property tax rate dedicated to city capital improvements will fall to 3 mills from 3.3 mills on Dec. 31. The total tax rate, including city, county and school taxes, is currently 70.5 mills.
The property tax on a residence valued at $154,200 will drop to $2,161 a year from the current $2,174.
The capital improvement tax property tax was first approved by voters in 1958 and renewed in 1976, 1987, 1994 and 2003.
The extension had to be decided at a special election because a November vote would be past the deadline for tax bills going out in early 2013.
Voters in September 2011 approved an increase in Little Rock’s sales tax rate that will generate $72 million over 10 years for street and drainage work.