State voters would be allowed to legalize charitable bingo through a proposed constitutional amendment recommended by a legislative committee Tuesday.
But other proposed constitutional amendments — one that would raise property taxes by an estimated $65 million and another to have annual legislative sessions — ran into trouble in the Joint Committee on Constitutional Amendments.
House Joint Resolution 1003 by Rep. Shirley Borhauer, RBella Vista, would allow nonprofit organizations in Arkansas to have raffles and bingo games, provided the money isn’t used to compensate anyone affiliated with the organizations. "I think we’re one of four states that don’t have some kind of charitable bingo," Borhauer said. "One representative said the ladies in her community are depressed because this is a wonderfully easy way for the ladies to get together and have a good time. It’s not, quote, unquote, a church project."
Larry Page of Roland, director of the Arkansas Faith and Ethics Council, said after the meeting that, while his group always opposes gambling, he thinks a bingo amendment might help keep out other forms of gambling, such as casinos and lotteries. He added that he’s comforted by the bingo proposal because it’s limited to nonprofit organizations. "Obviously we recognize the difference between casinos and bingo," Page said. "Charitable bingo is often used as a marketing tool [to pass] casino amendments. While we are not supporting this, at least [voters would] be given a chance [to approve bingo] without having to approve casinos. I think that’s the judgment of the legislators: Let’s give them a clean bingo bill."
Page said it’s too early to say whether his group would support the amendment in 2006 if the Legislature approves it for the ballot.
For the committee to recommend a proposed constitutional amendment, majorities of both its House members and Senate members must vote for the resolution proposing it. For a proposal to make the 2006 ballot, the House and Senate must pass it.
Senate Joint Resolution 5 by Sen. Shane Broadway, D-Bryant, to raise property taxes, and SJR6 by Sen. Shawn Womack, R-Mountain Home, to require the Legislature to meet every year instead of every two years as now, were rejected.
But Rep. Denny Sumpter DWest Memphis, committee cochairman, said those proposals may be resurrected. He said the committee may meet as early as today to further debate which proposals to place on the general election ballot in 2006.
SJR6, the annual-session proposal, received a recommendation from the Senate membership but not the House members.
SJR5, the property-tax proposal, received only two favorable votes from the Senate delegation — Broadway and Sen. Jim Argue, D-Little Rock. That negated the need for a vote of the House membership.
The Senate membership then voted to adjourn and left the room. Sumpter told fellow House members that the committee couldn’t conduct business without the senators. "Right now the Senate and the House has some things to work together on," Sumpter said. "I think we just couldn’t come to an agreement, so [the senators] decided they were ready to go."
SJR5 would make several changes to property-tax limitations in state constitutional Amendment 59, which passed in 1980, and Amendment 79, which passed in 2000.
Broadway describes the amendment as correcting inequities.
Page Kutait, deputy director of the state Department of Assessment Coordination, estimated it would cause a one-time increase of about $65 million in 2007. That increases includes about $40 million in state-mandated minimum property-tax rates for schools. Smaller increases would follow in years after that.
Rep. Bill Pritchard, R-Elkins, wondered if voters would go for such an increase. "I know it will be difficult to explain," Broadway responded. "But we have to make an attempt, or... the problem is going to grow even worse. You’re going to have severe disparities from county to county, and you’re going to have a lawsuit."
He said such a suit could result in a property-tax increase even bigger that the one that would result from his proposal.
Kutait said the amendment would correct imbalances in property assessments that benefit fast-growing counties by holding back property-tax increases, especially in Northwest Arkansas.
Kutait said the SJR5 would: Tax most property at full assessed value, starting in 2007. The exception would be for homesteads owned by those 65 and older. Caps on annual increases would apply after that.
Broadway said different counties are using different years as bases for property values. For example, he said Hot Springs Village residents in Saline County pay more because that county uses 2001 values as a base while Hot Springs Village residents in Garland County pay less because that county uses a base year in the 1990s. Exempt new construction from a 10 percent cap on annual increases in property-tax collections in a taxing district. Increase the cap on annual tax increases on homesteads from 5 percent to 10 percent. Set aside caps on property-tax increases in cases where the Legislature increases the assessment rate from its current 20 percent. The assessment rate is the percentage of appraised value that is taxed. Remove caps on property-tax increases when property is sold. The property would then taxed at full assessed value. After that, caps would be reinstated. Make sellers of agricultural land retroactively pay a higher property-tax rate if their land is sold for commercial or residential development.
Under current law, timberland owners pay less than $2 an acre in property taxes. The rationale behind such a low rate is that such owners only make money off the land when they cut down the trees, which can be every 20 years or so.
If the property is sold for development, it’s taxed at a higher rate as developed land, and that tax is paid by the buyer.
But under SJR5, the seller, who is making a profit off the sale, would retroactively pay three years of property tax on the land at the higher rate. Clarify that an owner who doesn’t sell his agricultural land to a developer but develops the land himself then pays taxes based on market value. It’s unclear now whether such a property owner can continue paying the agricultural rate after he develops the property. As a concession to property owners, the amendment would raise the $300 property-tax exemption for any property owner with a homestead whose property tax comes to more than $300.
The Legislature in 2000 approved increasing the sales tax by one-half percentage point to make up for the $300 propertytax exemption passed by voters that year. That sales tax collects about $20 million a year more than needed to compensate for the exemption, and the Legislature has used that money for other purposes. SJR5 would use that excess to raise property-tax exemptions.
An official from the Arkansas Education Association spoke in favor of SJR5. No one spoke against it.
