LITTLE ROCK, Ark. (KTHV) - Issue 2 on the Arkansas General Election ballot would authorize local governments to create tax districts. The purpose for these new districts would be redevelopment and to levy taxes to pay off debt to closed police and fire pension funds.
Policy makers hope Issue 2 will create opportunities for economic growth by funneling sales tax money to specific districts. This amendment could have a significant economic impact on communities across the state as it allows for STAR bonds.
"Sales tax anticipated revenue bond is what STAR stands for. The benefit of it is it's an economic development tool that will be beneficial for cities and counties to do things. It really works in undeveloped or blighted areas," says Sponsor of the amendment, Senator Jake Files of Ft. Smith.
If passed, the law would give cities and counties power to create tax districts. Policy makers hope it attracts businesses to undeveloped areas.
Once developed, the sales tax from these districts would go directly to pay off loans. This would not increase sales tax and would not impact the state's portion of sales tax. Also, Files says this is a starting point for the state legislature.
There is another portion in Issue Two that allows for cities and counties to use sales tax to pay off closed police and fire pensions.
Breaking down Issue 2 on the ballot