Conway committee hears that changing sales-tax patterns are shrinking local receipts; chamber proposes median-rate package for public safety, streets and arts

Jamie Gates, with the Conway Area Chamber of Commerce, told a Conway City committee that regional changes in where people shop and visit have put downward pressure on Conway’s local sales-tax collections and that a higher local rate could fund public safety vehicles, street maintenance and new arts and tourism amenities.

Gates said the city’s sales tax “is the one that that moves, and it's the one that that drives city government, and the way cities look and feel.” He told the committee Conway ranks near the bottom among Arkansas’ 20 largest cities on local sales-tax collections and property-tax levies and said the city has missed significant revenue after a 3/8-cent reduction enacted two years ago.

Why it matters: Gates and several business and arts leaders framed the question as a choices about competition and place-making, not short-term budgeting. They argued that a sales-tax increase to reach a median regional rate could create dedicated capital funds for police and fire apparatus, an ongoing street-maintenance fund, and pay for amenities such as a music pavilion, a Lake Conway boardwalk, a restored downtown theater, a farmers-market pavilion, convention facilities and downtown parking.

The chamber’s presentation pointed to three structural changes affecting Conway’s receipts: changes in regional brick-and-mortar retail (new stores and plazas in nearby cities), new visitor infrastructure in neighboring towns, and rising online/mail-order sales. Gates cited Academy Sports opening in Searcy and higher hotel-tax collections in Cabot as examples of neighboring growth that can shift spending away from Conway. He also noted rising NAICS-coded online sales for parts of Faulkner County and warned that where goods are delivered determines which jurisdiction’s sales tax is applied.

Gates gave specific figures during the presentation, saying Conway collected an estimated $12,000,000 less for street maintenance since the 3/8-cent rolloff two years ago and that the city “failed to collect sales taxes from $6,000,000 in sales taxes from people who were here visiting, were here passing through, or just don't live here.” He argued those losses show the city is not in structural decline but is losing share as the place where people make purchases.

Local officials and residents added viewpoints. Tyler Wenningham, the city’s chief financial officer, clarified that online purchases are taxed according to the delivery address: “when I order online, I pay the Greenbrier sales tax.” Business and arts leaders described the potential economic benefit of destination amenities. Jessica Crum, founder of Create Conway and a local business owner, said Create Conway’s events draw attendees who spend locally and that “the mission of Create Conway is to amplify Conway as a destination for arts, culture, and entertainment.”

Grace Raines, who runs the Arnold Elevation Center and the Conductor, urged the council to give voters the choice: “I would love to see you guys be, innovative leaders who cast a bold vision for what Conway could be and trust your constituents to then vote on that.” Caitlin Bailey, owner of Cross Creek Sandwich Shop, described household spending that currently leaves the local economy: “How much money is my simple family of 4 pouring into Northwest Arkansas when if there was something really cool, like the Lake Conway infrastructure thing, that we could just stick around here and do all of that here, that money would stay right here at home.”

Gates presented a model he said would fit inside a median-rate local-sales-tax package; under that model, he said, the city could meet essential maintenance needs while also funding quality-of-place projects intended to attract visitors, students and new residents. He cited recent economic-development announcements in Conway and a 2020 citizen survey (Conway 2035) as backing for prioritizing arts, culture and recreation in the city’s strategic planning.

No formal action was taken. The meeting was an open discussion; the mayor and council members indicated the topic will return for council consideration. The mayor said the item will come back to the council in either July or August for further deliberation and possible next steps.

Looking ahead: advocates urged officials to consider staffing and management for any new amenities—several speakers noted the city’s A&P (hotel-motel) staff is small compared with peer cities—and to present voters with concrete project and budget proposals if the council decides to pursue a ballot measure.