Kyle Kellams: This is a Friday after an Election Day throughout the state of Arkansas. We're going to talk a little bit about some results with Michael Tilley from Talk Business & Politics, as well as other topics. Michael, welcome back.
Michael Tilley: Thanks for having me.
Kellams: Well, let's talk about some tax questions that got the thumbs up from voters in Van Buren and Greenwood. What does this mean for voters in Greenwood?
Tilley: The city was asking for a 10-year extension. They have a three-quarters — 75% — sales tax. Three-quarters of a cent sales tax, I guess I should say. And it's funded primarily safety, police and fire infrastructure, parks, projects — the basics, the fundamentals. That tax has a 10-year sunset. It was first approved by voters in 2006. It was renewed in 2015. So here we go again. And voters gave it, as you said, a thumbs up — almost 60% of the vote, which is pretty healthy. That's a 20% margin. So that will continue for another 10 years. The city has used it, like I said, to build and renovate parks, including much of the work at Bell Park. I would encourage anyone in the Fort Smith area — if you get a chance, go look at Bell Park. I think your first thought will be, "This is a park in this size of a community? This is amazing." Also, they've used it — they built a second fire station. The extension will be used to build another fire station. That's a sign of Greenwood's growth. And then in Van Buren, voters were asked to pass a new tax — a half-cent sales tax increase. This request followed several years of community input meetings. You know, what do you guys want? Because they need roads, they need basic infrastructure, water, sewer, and then they funded some parks. And apparently the community came back and said, we want to do those, we want to support our fire system, and we want this community center. Van Buren doesn't have a community center. And so voters approved that. That was a little bit more of a narrow vote — about 53% for. But the tax will help fund about $37 million in parks and recreation improvements, including that new community center, and then a little over $8 million for a new fire station and some of the equipment for that. And that does not — well, let me back up. It doesn't have a sunset. It is in effect until those bonds tied to those projects are paid off. So again, as politically conservative as this region is — the Fort Smith metro is pretty red — it's interesting to see that folks still support those sales taxes that they see as a defined local impact. If you think government shouldn't be in the amenity business, OK. But you can't drive through Van Buren or Greenwood and argue that the taxes have not proven a benefit. Now it's up to those cities — apparently the voters thought they were using them correctly, and so it will be up to those cities to continue to do that.
Kellams: In 2014, the Department of Justice brought out this consent decree because the city of Fort Smith hadn't been maintaining the city sewer system correctly. We've talked about this consent decree. It seems as though maybe there's some traction now for Fort Smith getting to the end of the tunnel — not to the end of the tunnel of the work, but kind of the end of the tunnel on the dispute, the conflict with those two federal agencies.
Tilley: Something I knew — you know how sometimes you know something, but it got buried behind all the other stuff and somebody reminds you and you're like, "Oh yeah, I remember that"? Well, that happened in this discussion recently. I was reminded that the EPA had put the city under an administrative order back in 1982, which is much more lenient — they're just saying, look, we really would like for you to do these things. And the city even said, yeah, OK, sure, we'll get on that. And then didn't do it. So this 2014 consent decree, which was pretty rough on the city, it didn't just come out of nowhere. The city has, for decades, for various reasons, just primarily didn't have the political will to raise the money to fix the sewer system. So here we are. The consent decree was approved in 2014, and it's been tough. Right out of the bat, there was that historic flood in 2019 that destroyed part of the infrastructure — some of it that was under repair or had been repaired. And then in 2020, there was that little pandemic — I think people will remember that — that delayed a lot of stuff for months, not only delayed work, but delayed the ability — the supply chain, it impacted the supply chain. So the city of Fort Smith has been working with the EPA and Department of Justice to try to get an extension, to try to get a modification. And so they did — the key agreement, which we talked about, I think, last week. Key provisions: an 11½-year extension. There's more flexibility in terms of annual work requirements that the city is able to get. The DOJ and EPA also agreed to what's called a legal shot clock — if they have a dispute, it has to get brought immediately, nobody can delay having a dispute go to a federal court to work that out. And also another important thing: in the first agreement, if by 2031 certain things hadn't been accomplished, the feds would require the city to implement a 19% sewer rate increase. So that's off the books now. The Fort Smith Board of Directors approved this modified decree on Tuesday. Now it has to be approved by the attorney general's office — the Arkansas attorney general, the Arkansas Department of Energy and Environment, which used to be the ADEQ — and then the EPA and DOJ. And Paul Calamita, the attorney based in Richmond, Virginia, who's been helping Fort Smith through this process — he said he didn't expect any substantive changes through that process. EPA and DOJ are on board with this. They wrote it. So here we go. And one last thing — this could be a bit of the dog catching the car, right? Because the city's asked for relief from what were pretty stringent demands, and some of them you could argue were unreasonable, in that first decree. And we said, look, if you'll give us more time and flexibility, we promise we'll make it. All right, well, OK — now we have the time, the flexibility. And it appears — because the voters approved that tax package back in May of last year — we've got the money. So no more excuses. Barring another major natural catastrophe or pandemic in consecutive years, the city is now under pressure to get the system fixed the way they said they would get it fixed.
Kellams: Well, this is — I think most people in Fort Smith would agree — good news. Also good news for the sales tax revenue report reflecting taxes collected in 2026 for the city of Fort Smith. Up?
Tilley: Yes, up. And they were trending up toward the end of last year, but sales taxes were down overall in 2025. So this January report, which reflects transactions in December, showed that the city's share of the countywide tax was $2.3 — almost $2.4 million. And that was up almost 5% over the January 2025 report. The reason we watch that tax closely is the countywide tax revenue provides money for the city's general fund budget, and much of that budget pays for police, fire and other essential services. Now, the city's 1% — what we used to call the 1% street tax, which now also partially funds this federally mandated sewer system work we just talked about — that tax generated about $2.85 million. And so both of those are good trends. The net sales tax receipts — this is a new thing that Andy Richards, the city's chief financial officer, has been putting in the reports, and I find it very helpful and informative. He takes all of the sales tax receipts, which are the gross receipts minus any rebates the state holds back. In January that number was $5.8 million, and again that was up just under 1% compared to January 2025. So that's a good start for the city. We'll see if it continues. We've had this little conflict overseas, energy prices are going up, we don't know what impact that will have on the consumer going forward. But the horse is out of the gate at a pretty good trot.
Kellams: And you bring up uncertainty around prices and goods. Could that affect building activity in the Arkansas River Valley, which did go up in February?
Tilley: Yeah, it was a good February report. And you're right — we have heard concerns from developers and real estate folks about a potential slowdown in new commercial, new residential or even renovation in those two sectors. But in February, permits in Fort Smith, Greenwood and Van Buren totaled a little over $25 million, and that was up almost 82% compared to February 2025, and it was up a little over 48% compared to January. And think about the weather we had in February. So good numbers there. Now, most of that is from the city of Fort Smith — the value of their permits in February was $23.5 million. That was up 85% compared to February of last year. But again, January was a rough, rough start for all three cities. Fort Smith's permitted activity in January and February is just under $40 million, and that's down 8.5% compared to the same period in 2025. So there's going to be some ground to be made up. Van Buren, by the way, their permits were up 32% in February.
Kellams: Wow.
Tilley: Greenwood numbers are up a little over 300% — there was an unusual thing — but a little over 300%. So good news for both. What I was surprised about in the Fort Smith report was the residential and multifamily permits. The residential new home construction was $3.7 million, up almost nine times more than that in February of last year. Multifamily permits totaled about $6.9 million — that was up 183% compared to February of last year. It's rare. I've been watching these permit numbers for decades now, and it's rare to see those types of year-over-year increases in a month. We'll watch to see if that's just kind of a one-time blip. But it's interesting that both new single-family and new multifamily both hit big in the same month.
Kellams: Full report, as well as so much more information, at Talk Business & Politics. Michael Tilley is with Talk Business & Politics. Thanks, Michael.
Tilley: Hey, I appreciate the opportunity to share the news.
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