Voluntary tax serves as tip jar for cities
Posted on Sunday, May 18, 2008
URL: http://www.nwanews.com/adg/News/226059/
SPRINGDALE — Harold Sargent paid $ 291 in voluntary taxes last year to help the Springdale Fire Department and the city library.
He didn’t do it out of the goodness of his heart, though.
Sure, he knew he was paying an amount that wasn’t required, but the business he’s operated for 42 years had a new sprinkler system, and it has to pass a fire department inspection.
“I wasn’t expecting no break, but I didn’t want no hard time, either,” said Sargent, who owns Farmers Livestock Auction. “I was saying, ‘I’m not against you boys.’
“ But there ain’t no use in them standing by the post office box this year ’cause I won’t be sending it in. I already passed inspection.”
It’s nonsense to think the Fire Department might pick on someone who didn’t pay the voluntary tax, a fee that’s been requested by the city since at least the 1950 s, said Springdale Fire Chief Duane Atha.
“I can tell you 100 percent that I have no clue who sends in money or how much they send in,” Atha said.
Enter the world of voluntary taxes, where some pay but most do not.
Springdale’s got the Fire Department tax and one for its library, and there are similar taxes collected across the state.
The pay-if-you-want fees give small financial boosts to recycling centers, cemeteries, animal shelters, parks, road departments, soil conservation districts, fire departments and historic commissions.
They can be found in Bentonville, Lowell, Prairie Grove, Lavaca, Lincoln, Conway and others. Voluntary taxes help support government functions in Saline, Miller, Benton, Faulkner and Van Buren counties. “We communicate that it’s voluntary,” said Springdale City Clerk Denise Pearce, who’s office spent $ 10, 124 last year to collect $ 69, 691 for the Fire Department and library. “I know money is tight for everyone.” Government shouldn’t ask residents or businesses to pay voluntary taxes, said William Ahern, a spokesman for The Tax Foundation, a Washington taxpayer education group founded in 1937. The requests are improper, Ahern said. “For any legislature — city, county, state or federal — to say, ‘It’s voluntary, but you really should give it,’ is unseemly and unworthy of rational government operation,” Ahern said. “If they need the funds, levy the tax. If they don’t need it, don’t, but in no way should the government beg.”
RESIDENTS’ GIFTS Dan Cypert, a Springdale lawyer, paid $ 616 in voluntary taxes last year because he’s helping “a good cause.”
The $ 370 for the Fire Department is enough to pay for 74 feet of the 1, 050-foot hose carried on a fire trucks to stretch between a truck and hydrant.
The library’s $ 246 is enough for eight hard-cover books.
“I just count it as a contribution as if someone came around and raised money for the library and the Fire Department,” Cypert said.
Springdale sent notices earlier this month to 21, 000 city addresses in Washington County, requesting the voluntary contributions based on the value of personal property and real estate.
The notices to Springdale residents who live in Benton County go out in a couple of weeks, Pearce said.
Washington County Treasurer Roger Haney said there’s been confusion about volun- tary taxes for at least two decades — yet, many groups continue to collect them. The Washington County tax bill, for example, requests voluntary taxes on behalf of fire and police departments in Prairie Grove and Lincoln.
The Springdale voluntary taxes had been listed on the regular Washington County property tax bills, too, and collections dropped markedly when the city started sending out its own notices in 1995.
The Springdale Fire Department and library received $ 350, 265 in 1994. Donations plunged to $ 119, 798 the following year.
“For a long time, people paid them because they didn’t know they were voluntary,” Haney said.
Those same worries about clarity can be found across Arkansas, said Saline County Collector Chris Villines. That county’s voluntary tax asks the owners of the 70, 000 parcels in the county to contribute $ 5 per parcel for weather sirens and weather radios.
Of the $ 350, 000 requested last year, the county received $ 20, 000.
Villines said his desire to be extra clear that the tax is voluntary probably cut the amount of money that might have come in.
“What was important to me was to present it in a way that won’t trick them into paying,” Villines said. “We wanted to be forthright.”
GLITCHES Pearce realized something was amiss with last year’s collections when she found out Springdale Mayor Jerre Van Hoose wrote a check for just $ 12. 35 to pay his voluntary tax bill. Van Hoose owns two cars and a $ 240, 000 house, and Pearce knew his voluntary tax bill should have been much higher.
“I thought it applied only to personal property,” Van Hoose said.
After talking with Washington County Collector David Ruff, Pearce learned that not all real estate owners received a request for voluntary taxes prior to this year.
Some residents in previous years were asked to pay voluntary taxes based only on the value of their vehicles and other personal property, including Van Hoose and Library Director Marcia Ransom. The county’s database given by the county to the city so it could mail the requests didn’t include all the addresses for people who owned real estate, Ruff said.
Van Hoose was asked to pay $ 149 this year because his house is included.
The city wants $ 43 from Ransom, who remembers paying less than $ 10 previously.
“It seems like there’s a discrepancy,” Ransom said. “We don’t know now if they aren’t paying because they chose to or because they haven’t been billed.”
Ruff took the blame, sort of.
“Let’s just say, we were more accurate this year,” Ruff said. “That’s a whole lot better than we were inaccurate last year. Even though I don’t have an opponent, this is an election year.”
There’s confusion about voluntary taxes in other places. City clerks and finance directors said they receive calls every year from people who want to make certain the word “voluntary” truly means optional.
“You want to make it as clear as possible,” Ruff said, “but the clearer I try to make it, the more telephone calls I get.”
In Bentonville, notices were mistakenly sent out in December to every person who had a Bentonville address even if they didn’t live within the city limits.
Fire Chief Dan White notified the media and advised outof-town residents to ignore the request, said Denise Land, the city’s finance director.
In Lowell, a private company hired by the city messed up the 2007 billing.
The letters, which were never mailed, requested payments for the Fire Department based on the full value of property rather than the assessed value. They were reprinted to request the lower amount, said City Finance Director Mary Mason, whose office has taken over the work. “If everyone pays everything that’s requested, it’s $ 112, 596,” she said. So far, $ 24, 847 has arrived. Another voluntary request will go out in July, requesting money for this year.
COMPANIES DON’T PAY Tyson Foods Inc., Springdale’s biggest property owner, was asked to give $ 77, 511 to the Fire Department and library this year, city records show. The company didn’t contribute last year.
“As one of the leading taxpayers in Springdale, we’ve not historically given to the voluntary tax program,” said Gary Mickelson, a company spokesman. “Instead, we make tens of thousands of dollars in donations each year to Springdale schools, nonprofit organizations and events.”
Wal-Mart Stores Inc. in Bentonville doesn’t contribute voluntary taxes, either. A company spokesman declined to say why, pointing out that Wal-Mart contributes to other charities and causes.
Contributions do come from J. B. Hunt Transport Services in Lowell for that city’s fire department.
Records show the company gave $ 8, 699 in 2006.
The company gave nothing to Lowell’s road department or historic commission. A J. B. Hunt spokesman declined to comment.
While there’s a long list of companies and individuals that do pay, the majority of property owners do not.
Benton County Judge Gary Black, who’s responsibilities include overseeing the road department that requests voluntary taxes, said he quit paying after voters in 2005 defeated a half-cent sales tax meant for county roads.
“I went out there and told the people that we needed some money for roads, and they agreed, and they weren’t willing to belly up to the bar and pay it,” Black said. “I got to thinking if they weren’t willing, why should I ?
“ I used to pay my voluntary stuff on the Bentonville city stuff, too, but I started tightening up my belt.”
Rogers, Fort Smith, Little Rock, North Little Rock and Fayetteville don’t request voluntary taxes.
That’s a good thing, said Ahern, the Tax Foundation spokesman.
“In our opinion, voluntary taxes are moronic,” Ahern said. “An entity as powerful as the government should know better than to ask for a contribution. It has way too much authority, because it has the authority to tax.”
Ruff sides with Ahern.
“I was in the Army, and they taught me never to volunteer for anything,” Ruff said. “If they really want the money, they should have the people vote.”