Pine Bluff aldermen learned Wednesday that sales tax revenue is projected to meet the approved 2017 city budget, based on year-to-date actual receipts.
Aldermen Bill Brumett, Steven Mays, Glen Brown Jr. and Bruce Lockett heard from Pine Bluff Finance Department Director Steve Miller at a meeting of the Ways and Means Committee. This committee consists of Brumett as chairman, Mays and Brown. Looking at the cumulative year-to-date tax revenue receipts, Miller said the city sales tax revenue is below projections by 0.5 percent or $11,487 and that the county is below projections by 0.83 percent or $16,635.
“I was going to say sales tax was up but then we had April, which threw a monkey wrench,” Miller said. “The city side is two and a half percent below [projections] and the county side is 3.9 percent below [projections] for April.”
Yet, overall, Miller said he expects the forecast to meet the budget.
“Amazon agreed to pay sales tax in Arkansas, we will start seeing that in our collections in May,” Miller said, referring to the online retail giant. “When you buy from one of their affiliates, they are still not charging sales taxes. About half their sales are from their affiliates. There is going to be some impact. No one knows what it is going to be. Little Rock has said $3 million.”
Independent reporting for Pine Bluff & Jefferson County since 1879.
Miller said another factor that bodes well in relation to the collection of more tax money stems from the Arkansas Municipal League, which lobbied the Arkansas Legislature to approve a bill to lower the early filing fee. This matter pertains to merchants and is being lowered from 3 percent to 1.5 percent.
“That 1.5 percent savings comes to us in more revenue,” Miller said. “We will begin seeing that 90 days after the bill is signed. It should be reflected in July and showing up in our receipts in September.”
“I am forecasting sales tax will be flat,” Miller said. “Since we budgeted below last year, we might have upside from that projection.”
“We will be approximately even with our budget by the end of the year,” Brumett said.
On a discussion about the feasibility of giving raises, Brumett said it hinges on finding a revenue stream. It similarly hinges on the collection on tax revenues from Amazon and the collection of a higher percentage of money through occupational taxes, Brumett said. The city of Pine Bluff employees would collectively get paid an extra $500,000 if they received a pay increase of three percent, Brumett said.
“That is my goal,” Brumett said of the prospect of giving raises. “It may be September before we see the impact of these changes. At that point we will do an evaluation to see if we can fund it.”
Mays asked Miller about the status of the Fair Merchant Act in relation to Internet sales, and Miller responded that the Congress is considering it. Mays followed up his question by saying this matter is based on the shared 71602 ZIP code. Miller told Mays that the City of Pine Bluff is already losing money through the non-payment of sales tax on Internet companies. Miller did not discuss the matter in relation to ZIP code.
“Once you establish a warehouse, you are a good corporate citizen, you employ people, then we start taxing you,” Miller said. “If you are an outsider, you come in cannibalizing getting sales from our merchants, you get an unfair advantage.”
Mays believes that Pine Bluff is not getting its fair share of tax revenue because it shares a 71602 ZIP code with White Hall. He has been espousing this idea in public for three years.
“We are going to lose a lot of money off the Internet,” Mays said.
Brumett admonished Mays for mentioning the shared ZIP code in relation to the collection of tax revenue.
“Come on, Steve, please don’t keep on doing that,” Brumett said. “It’s not true.”
Miller responded that Pine Bluff Mayor Shirley Washington has pointed a committee to investigate the matter.
Brumett noted that there is an organization of local merchants who encourage Pine Bluff residents to spend money at Pine Bluff merchants. In a separate discussion, the four aldermen lamented the city of Pine Bluff hiring firefighters and police officers and then losing them to other Arkansas communities that pay more money for the same jobs. Lockett said he wished a law could require the city of Pine Bluff to be reimbursed by other cities when the former pays money to train an officer who then works for another municipality. Lockett called for Pine Bluff to consider consolidating a fire station. Brown responded that firefighters argue that they need all their current fire stations to lower response times to emergencies.
“If they are kidnapping our people, then we need some ransom money,” Lockett said. “We’ve got to see if there is a legislative remedy.”