Garland County voters will decide if the 0.625% sales tax securing $54.6 million in road bonds will be extended through June 30, 2027, weighing in at a Feb. 8 special election.
An ordinance the Garland County Quorum Court adopted Monday night with no discussion or debate called for the special election to extend collection of the countywide sales tax.
County Judge Darryl Mahoney told the quorum court's Public Health, Welfare and Safety Committee last week that collections are on pace to retire the road bonds before the end of next year's first quarter, more than a year earlier than what was projected when Stephens Inc. marketed the debt in October 2016.
Mahoney said proceeds from the extension would not secure more debt but would flow to the county road fund, similar to how proceeds from the 0.375% countywide sales tax voters approved in 2011 to operate and maintain the county detention center flow to the county jail fund. If voters reject the extension of the 0.625% sales tax, Mahoney could sign a termination of tax certificate by March 31, taking the tax off the books by July 1.
If the sales tax is extended, the proceeds would fund the improvement and replacement of existing roadways, including bridges, overpasses, underpasses and sidewalks, according to the ballot question the quorum court adopted Monday night.
Mahoney told justices of the peace last week the proceeds would not be used for infrastructure expansion. The county contributed $30 million from the $54.6 million bond issue voters approved in a June 2016 special election to the $79 million extension of the King Expressway from the Highway 70 east interchange to the junction of highways 5 and 7.
The 2016 vote granted the first extension of the sales tax, which voters initially approved in an October 2011 special election to secure $41 million in capital improvement bonds that financed the construction of the detention center at 3564 Albert Pike Road.
Collections began in April 2012 and continued through 2016. The termination of tax certificate former County Judge Rick Davis signed at the end of the third quarter of 2016 suspended collections from Jan. 1, 2017, to June 30 of that year.
Bond proceeds the tax secures were distributed to the county and its four incorporated areas on a per capita basis. The proceeds from the sales tax extension would also be distributed on a per capita basis, as the state tax code requires counties that levy a 0.50% sales tax to share the proceeds of any additional sales tax with its incorporated areas on a per capita basis. Garland County levies a 0.50% countywide sales tax in support of its general and solid waste funds.
Mahoney said the sales tax generates about $14 million a year. The county's share from the extension would be more than $40 million, he said, and the city of Hot Springs' share would be more than $20 million.
According to the 2022 budget the quorum court will consider next month, the county and Hot Springs have $6 million and $5 million, respectively, in their local shares of the $54.6 million bond issue floated in the fall of 2016. An interlocal agreement the two governments signed prior to the 2016 election pledged a combined $3.8 million from the city-county shares to partner with the state in reconfiguring the Airport Road-expressway interchange.
Mahoney told JPs last month that the state's 0.50% sales tax will fund improvements to the interchange, as well as improvements to other expressway interchanges. The legislatively referred constitutional amendment voters approved last November made the statewide sales tax a permanent levy.
Act 610 the Legislature passed earlier this year allows next year's special election to be held in February, May, August or November. The May and November dates have to coincide with the May 24 preferential primaries and nonpartisan general election and the Nov. 8 general election.
Voters approved the June 2016 extension by a 4,601-2,637 margin. Less than 12% of the county's more than 60,000 registered voters cast a ballot. Mahoney said holding the special election on a second extension in February, rather than during the May primaries or November general election, when turnout would be higher, allows for the continuous collection of the tax. Holding the election later in the year risks an interruption in collections.
The extension will be on the ballot with millage increases the Fountain Lake and Mountain Pine school districts are requesting.
The quorum court usually meets on the second Monday of the month but holds its November meeting on the fourth Monday. Millage rates for the county's taxing entities are levied during the November meeting. Property tax rates for the 2021 tax year are unchanged from 2020. The 2021 tax bills go out in February.