AR city looking to implement new sales tax

By Josh Harvison - bio | email

PARAGOULD, AR (KAIT) – The city of Paragould Monday night discussed options to implement an economic development tax in October if voters approved of a measure in a special election in June. According to Mayor Mike Gaskill, council members are considering a measure that would allow voters to choose whether they want to pay a quarter cent on every dollar spent in the city. Gaskill said council members postponed a third reading at the council meeting Monday night to give voters a chance to voice their concern.

"The Economic Development Committee of Paragould came before the council last night and asked them to call an election that would bring about a quarter cent sales tax for economic development purposes," said Gaskill. "We have a half penny on right now that's temporary for a bond issue that we did in 2001 for our parks and recreation. They asked for that quarter cent in anticipation that half penny would be coming off soon."

Gaskill said the third reading would be held April 11 and he expects council members to approve the measure. Gaskill said other city sales taxes are expected to expire by June.

"At the end of that, if this quarter cent is passed, in actuality, the sales tax would be lower than it is right now," said Gaskill. "This money would be dedicated strictly to economic development."

Gaskill estimates the quarter cent sales tax would generate roughly $1-million each year, give or take.

"It's a lot of money. When you start looking at land, you start buying land at $10,000 an acre or you start running sewer or water or power lines, things like that. All those things come to play," said Gaskill. "With these resources, some of these industries that have moved to our state have looked at Paragould, but because other communities had economic development dollars to spend, they went there."

Gaskill said the tax would be used to attract industry into the area and prop up existing companies looking to expand.

"We have shown that you can do amazing things with a penny. You go out and you look at the community center. You look at the pool. You look at the water filtration plant," said Gaskill. "Mississippi County is one of the counties that's close to us that has an economic development tax. Newport has an economic development tax they're fixing to vote on again. Batesville has an economic development tax."

Residents Region 8 News spoke with Tuesday were split on the tax issue, although most said they favored the tax.

"I think it will promote more jobs and I think it'll be great for the city," said Mary Robertson, who moved back to Paragould from Missouri. "I like to go out to the parks in the summer time, to barbeque and to swim. I love to go to the pool. They enjoy themselves. It's a good family activity. It's something the city offers and I think it's a wonderful thing."

Robertson said she was happy the city has grown over the last few decades; however, other residents said the city's success can't be focused solely on a tax.

"I don't see any development. If we were getting something for our money, that may be another story," said Dennis Strickland, who has lived in Paragould for 30 years. "We're overtaxed now and I haven't seen any economic development since I've lived here. Everything that's come in here is looking for cheap minimum wage jobs."

Paragould's sales tax currently stands at 8.5 cents on every dollar. If the new tax is approved, the tax would be 7.75 cents on every dollar.

"Sometimes it's give and take. How long is it taking the tax base to pay that money back and how much of that money was state money?" said Strickland of previous tax issues.

Gaskill said his main concern is that the city doesn't grow and other communities win competition for industry.

"It's important when you look around Paragould and Greene County and outside of Craighead County, every county around us shrunk in population," said Gaskill. "One of the things that we're going to have to do is work hard to create jobs to make sure we continue to grow."

If approved, Gaskill said the money would be handled by the city council. He said the Economic Development Commission of Paragould would pay for the special election.

"It's going to go for infrastructure, go for the purchase of land so we can do industrial parks. We can run water, run sewer to those things," said Gaskill. "We're just kind of looking to the future, and we don't want to be in a situation to where we get to a point to where we have to do something to survive."

"The half penny permanent tax that we passed back in 2001, we've used some of that to help with economic development. The city has participated in that, but we've never had money just dedicated strictly to that. That purpose and that purpose only," said Gaskill.

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