Editor’s note: This story is a component of The Compass Report. The quarterly Compass Report is managed by The City Wire, and sponsored by Arvest Bank. Supporting sponsors of The Compass Report are Cox Communications and the Fort Smith Regional Chamber of Commerce.
The January revenue report for Fort Smith shows sales tax collections up more than 7%, an indication that merchants in the city had a robust holiday sales season, and a good start for a city that has struggled with weak tax revenue collections.
The city’s portion of a 1% sales tax for street improvements generated $2.023 million in the January 2015 report, up 7.31% above the same month in 2014, and up 7.94% above budget estimates. The collections were the highest for a January report since 2012 when the tally was $2.049 million. (Because the state of Arkansas has a two-month delay in reporting collections back to the cities, the city of Fort Smith — for budgeting purposes — has historically reflected the collections on a one-month delay. Which is to say, the tax collections remitted to cities in February are from taxes collected in December and transferred by merchants to the state in January.)
January’s report continues the trend from 2014. Collections during 2014 the Fort Smith’s 1% sales tax for the street program topped $20 million for the first time since 2008. The 1% tax generated $20.099 million for the January-December reporting period, up 3.24% over 2013, and was above the budget estimate by 0.78%.
Collections for the past five years have been inconsistent. Revenue from the city’s street tax was down 0.87% in 2010, up 3.9% in 2011, up 1.36% in 2012, and down 0.69%.
The city’s portion of the countywide 1% sales tax generated $1.532 million in January 2015 report, up 5.25% above January 2014, and up 5.4% above budget estimates. The countywide tax collection is critical because the revenue is a little more than 40% of the city’s general budget of roughly $42 million. A majority of the general fund budget supports fire, police and other critical city functions.
January’s report is also the continuation of a trend for the county tax. The city’s portion of the countywide 1% sales tax generated $15.625 million in the 2014 reporting period, up 1.77% above 2013 collections, and up 1.29% above budget estimates.
If national predictions hold for the Fort Smith metro, sales tax collections could remain positive for the remainder of the year. The National Retail Federation said Feb. 12 that retail sales should rise 4.1% in 2015, better than the 3.5% gain in 2014. Online sales are expected to increase between 7% and 10% this year, according to the trade group’s forecast.
Fort Smith’s sales tax revenue increase of 7.31% for the month also compares favorably to the overall 9.43% gain seen with the combined collections of Northwest Arkansas’ four largest cities. For the month, Bentonville revenue was down 5.83%, Fayetteville was up 9.28%, Rogers was up 14.33% and Springdale was up 17.3%.
PREVIOUS ANNUAL COLLECTION INFO
Fort Smith 2% sales tax collection (1% for streets; 1% for water/sewer bonds)
2014: $40.198 million
2013: $38.938 million
2012: $39.210 million
2011: $38.683 million
2010: $37.229 million
2009: $37.554 million
2008: $41.226 million
2007: $37.858 million
2006: $36.840 million
Fort Smith portion of 1% countywide sales tax
2014: $15.625 million
2013: $15.353 million
2012: $15.279 million
2011: $15.15 million
2010: $14.89 million
2009: $15.04 million
2008: $16.61 million
2007: $15.15 million
2006: $14.71 million