Tracking your money: Millions of dollars collected through food tax

Published: Feb. 26, 2023 at 8:19 PM CST
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JONESBORO, Ark. (KAIT) - After years of delayed plans, discussions, and studies, a sports complex is in the works for Jonesboro.

But this dream come true for the city is costing anyone who visits Jonesboro a pretty penny each time they eat out at a restaurant.

“It is something that we’ve looked at, talked about, and worked on for going back 20 or 30 years,” said Jerry Morgan, chairman of the Jonesboro Advertising and Promotions Commission.

The Jonesboro City Council passed the resolution to add a 2% prepared food tax in November of 2021.

The tax began in January 2022.

RELATED: City of Jonesboro approved prepared food tax

Reporter Imani Williams received 2022 bank records through a public records request from the Jonesboro Advertising and Promotions Commission.

From February to September 2022, the commission collected nearly $4 million from the prepared food tax.

So, over only 8 months, millions of dollars were collected from people in Jonesboro simply eating out.

Before the ordinance was passed, some residents were worried this tax would go into effect and there would be no progress in building a sports complex. Residents questioned why a tax would be implemented before plans for a complex were released.

Morgan said the commission needed to implement the tax before a feasibility study was done.

“We knew we needed it, we knew the citizens of Jonesboro needed it and wanted it, so we went ahead and went with the execution of the prepared food tax like many other cities in Arkansas already have place,” he said.

Morgan added the tax approval showed the city was committed to the project.

“What it does is let people realize--consultants and builders and citizens--realize we are serious about it,” he said. “It’s not just going to be talks. It’s not just going to be another project on the shelf that doesn’t get funded.”

On average, the lowest-income families in the United States spent over $4,000 on food in 2021 and the highest-income families spent over $13,000 annually on food, according to the United States Department of Agriculture.

Census data shows on average in Jonesboro, a person makes $28,000 a year.

Food is a large portion of where money made in a household is spent, and with inflation, that number increased.

This added to the amount on dinner, lunch, and breakfast bills through the prepared food tax each time customers ate out.

Morgan explained although more was being collected, the price of the sports complex project also increased.

“Obviously, with the inflation of food costs, the revenues have come in higher than expected,” he said “But on the other side, the cost of the facility has escalated significantly too.”

Over those 8 months in 2022, the city collected an average of $469,000 each month from the 2% tax.

Some residents believe the food tax was the right option to create a space in Jonesboro for young athletes.

Many parents and coaches spoke at city council meetings about the need for a space.

A location was approved in October 2022 near the intersection of Race Street and McClellan Drive.

“Another factor is that we wanted it to be close to town, close to the restaurants, shopping, and hotels. So, when people do come into town for a sporting event, the facility is close to those areas,” said Morgan.

RELATED: Feasibility study presented to public

The commission estimated the 2% tax would collect about $5 million a year.

The tax is planned to fund the construction of the actual sports complex and its operations once it opens.

By October 2022, the commission paid $50,000 for the feasibility study by Eastern Sports Management, plus just over $6,000 for travel expenses for the team to do the study.