This isn’t an ideal year for proposing new taxes. From the federal government (with the possible expiration of the Bush-era tax cuts) to our state government (with several different potential taxes being discussed as options to fund the highway system), no one arguing for tax increases is getting much traction.

So how will the anti-tax mood play out at the local level? Citizens of Fort Smith are about to find out, with a poorly funded convention center staring them in the face and city directors calling for a sales tax to maintain the center.

The Fort Smith Convention Center has been open since 2001. The center typically runs a deficit of between $600,000 and $1.1 million. Until this year, the state covered the deficit by sending Fort Smith about $1.8 million a year in turnback tax revenue for the center. That source of funding ended on June 30, and now the city has to find some other way to fund the center.

Enter the 1 percent sales tax on prepared foods, which most of the city directors believe is the solution for the convention center’s woes. An ad hoc committee several months ago considered a sampling of other options before deciding that taxing prepared food was the way to go. The tax would bring in an estimated $1.8 million a year, more than enough to cover the center -- the rest of the funds would be used to beef up the new U.S. Marshals Museum and other local projects. The Board of Directors tentatively plans to present the proposal to the voters in a special election in spring 2011.

As one might expect, the plan faces strong opposition from Fort Smith restaurateurs. On July 19, Eddie York of Art’s BBQ hosted an hour-long meeting of about 25 city restaurant owners, where they discussed how to effectively fight the tax proposal. “Under no circumstances were we intending to bash the convention center,” says Scott Blair, co-owner of Calico County, a popular eating establishment. “We’re just asking why are we the ones that are going to be the focal point in trying to save it?”

Blair points out that the restaurants are already heavily taxed. In addition to the 9.25% combined sales tax (6% to the state, 2% to the city, and 1.25% to the county), restaurant owners pay a $2-per-gallon soft drink tax. Restaurants that serve alcohol also have a beer tax and mixed drink tax.

Another tax that hurts the restaurants is actually one that has been cut -- the statewide grocery tax, which has gone from 6% to 2%. Blair supports cutting that tax but says it doesn’t make things easier for his business. “Now grocery store purchases are taxed less and I’m taxed more,” he says. “Eating at home is more affordable for people.”

If Fort Smith were a high-tourism area, Blair says, a prepared food tax wouldn’t be a big deal because a big percentage of customers would be away from home and wouldn’t have the option of making their own meals. “But 80-90% of our business is local,” he says.

Other solutions to the funding crisis have been proposed, including reallocating a percentage of the street tax, instituting a 1% hospitality tax, or handing the center’s operations over to a third party. Gary Campbell, who currently holds an at-large position on the Board of Directors, says the latter of those options is worth taking the time to consider. “A private operator,” he says, “is more likely to make the center pay for itself than anyone else is.”

But according to Campbell, the city hasn’t given enough consideration to the idea. He says he has spoken to at least one private operator who had attempted to contact the city administration in order to make a proposal, and never received any call back.

That story only plays into the public perception that the administration and the Board of Directors are both too obstinate to consider all options and too slow to find those options. Many voters don’t understand why the directors plan to present the tax to voters in a special election in spring 2011, rather than putting it on the ballot in the general election this year. According to Blair, the restaurant owners think the directors want to wait until after their reelections to bring up a new tax. “Why can’t we just [vote on] it in November?” he asks.

Campbell, whose term expires this year and who is not running for reelection in the fall, argues that the city needs to take time to make sure of its course before presenting any options to voters. “We don’t need to call an election,” he says, “unless there’s some chance the measure will pass.” He wants the board to find out what citizens are thinking and to discuss alternate solutions, if it turns out the voters won’t approve the proposed tax.

Blair fears that if the people reject a sales tax at the polls, the Board of Directors could decide to pass it anyway. Campbell disagrees. “In the 16 years I have been on the board,” he says, “it has never passed a tax on its own.” Campbell says he would not vote to impose such a tax if the citizens had voted it down. (He won’t have the chance, since he will be out of office at that point.)

The food tax was at the forefront of the recent primary election for Position 4 on the Board of Directors. George Catsavis, a restaurant owner who opposes any type of new tax to support the convention center, got the most votes. In the runoff (which will take place in the general election in November), Catsavis will face primary second-place finisher Patrick Jacobs, who hasn’t taken a stance on the issue. The food tax will likely be the major issue in the other directorial races as well.

Some citizens think Fort Smith would be better off dumping the convention center. Blair won’t go that far, though he does contend that the center doesn’t help local restaurants get more business, except for a few in the downtown area. “This is not a revolt or uprising against the convention center,” he emphasizes.

Campbell says the convention center plays a vital role for Fort Smith. “We need the center,” he says, “because it supports jobs and the local economy.”

But is it worth paying another tax? That’s the question Fort Smith voters must answer, and given the current mood, they’re probably not likely to say yes.

Fort Smith isn't the only local government that has been dealing with sales tax issues this year.