story by Kim Souza
ksouza@thecitywire.com
Combined sales tax revenue in the most recent report for Northwest Arkansas’ four largest cities was up 9.43% – a clear sign of strong consumer confidence in the metro economy.
The four cites reported composite revenue of $5.356 million this month, a gain of $462,000 from the year-ago period. All of the cities except Bentonville reported gains from the same month last year.
Revenue reported in February reflects consumer purchases in December, recreating a two-month lag in the reporting. All of the cities collect a 2% tax on goods and services which is split evenly between repaying debt and supporting operational budgets. This report reflects the latter 1%.
February Revenue
• Bentonville: $841,178, down 5.83%
• Fayetteville: $1.872 million, up 9.28%
• Rogers: $1.611 million, up 14.38%
• Springdale: $1.391 million, up 17.3%
Bentonville often has the largest swings in its sales tax revenue given so much of the city’s traffic is a result of business travel which is typically lower in December. The recent dip comes on the heels of 24% gain last month.City finance director Denise Land has said she isn’t concerned with monthly dips in revenue because there’s usually a banner month to follow.
Rogers city officials are not surprised to see strong revenue this month as they relate to holiday shopping. Retailers from Wal-Mart to Dillard’s have said they saw positive traffic this past holiday season. In the first two months of this year, revenue collections are outpacing budget by 2% in January and by 25% this month.
Springdale Mayor Doug Sprouse said he knew the Wal-Mart supercenter opening near Interstate 49 would have a big impact on the city’s sales tax, but he’s even more excited about the Sam’s Club slated to open late this year if all goes well. February’s $1.391 million revenue was a record for the city. In fact, the city has only crossed the $1 million mark three other times in the past five years. All three were last year, July, August and October. So far this year Springdale’s sales tax revenue is up 37% in the combined first two months when compared to the same period last year.
Sales tax revenue in Fayetteville rose 9.38% this month, extending the 6.65% gain reported last month. Like Rogers, Fayetteville benefits from its shopping district during the holidays. City leaders are excited about the Whole Foods which is slated to open later this year as it will be only location in Northwest Arkansas for the popular alternative food store.
Recent sales tax records indicate consumers in Northwest Arkansas are more comfortable spending and economists equate that lower fuel prices which is putting a tidy sum into family budgets.
“Consumer spending growth will be solid in 2015 thanks to more jobs, higher wages, and lower energy costs,” said Gus Faucher, senior economist at PNC Financial Services.
Economists estimate the relief consumers were seeing in gas prices back in December put an average of $60 more dollars a month in family pockets. As long as fuel price remains below the $2.50 level consumers will continue to see savings over the $3.50 and higher prices paid a year ago. Fuel prices have begun to rise in recent days. On a cumulative basis for each penny fuel prices rise, $1 billion is lost in spending power.
Sales Tax Revenue (year to date)
Bentonville
2015: $1.686 million
2014: $1.573 million
7.18%
Fayetteville
2015: $3.432 million
2014: $3.176
8%
Rogers
2015: $2.871 million
2014: $2.654 million
8.17%
Springdale
2015: $2.001 million
2014: $1.687 milion
18.6%