Consumer spending among the four largest cities in Northwest Arkansas ticked up slightly in March according to cumulative sales tax revenue of $4.517 million reported this month.
Fayetteville, Bentonville, Springdale and Rogers reported 1.6% more sales tax revenue than the $4.446 million reported in the same month last year.
There is a two-month lag in the reporting from the time the taxes are collected by local businesses until the revenue is reported by the respective cities. All four cities collect a 2% sales tax on goods and services. Half of the proceeds are used to retire debt and 1% is funneled into the city budgets. This report reflects the latter.
MAY REPORT – TAX REVENUE
Bentonville: $813,591, down 6.47%
Fayetteville: $1.516 million, up 2.93%
Rogers: $1.246 million, up 3.62%
Springdale: $941,066, up 4.59%
Collections-to-date in 2014 total $17.661 million, lagging the $17.846 million collected through the same time period last year. But city officials are not concerned with the dip because all said they budgeted conservatively after a strong year in 2013.
And it’s early in a year that saw weather disruptions. Winter weather drug well into spring with snow blanketing Benton and Washington counties as late as mid March, taking a toll on restaurant traffic and retail shopping.
Wal-Mart was among a long list of retailers to report tepid sales and rising inventories related to the prolonged inclement weather.
Rogers has a large retail presence in the region and while its sales tax revenue fared well in March, collections year-to-date are flat. Casey Wilhelm finance director for the city, said collections are tracking 2% over budget so far this year, something she attributes to a brutal winter that kept people indoors and pushed utility costs higher.
She is optimistic for strong summer collections with the June 7 opening of the Walmart AMP. Wilhelm said the music venue will make Rogers and this region an entertainment destination. The Walmart AMP has slated 12 concerts this summer, two of those have already sold out — Blake Shelton on June 7 and Dierks Bentley on on June 28 — both shows were presented by Wal-Mart.
In Fayetteville, the other major retail center in the region, revenue is down slightly through March. The city reported revenue of $7.161 million in the first three months of this year. That was $57,594 less than collected in the same period last year.
Finance Director Paul Becker notes that the revenue was down 8.43% in January, but rebounded 4.6% in February and 1.49% in March. The annual city budget, which includes December 2013, shows total revenue for the city of Fayetteville is 1.84% behind budget expectations.
Springdale revenue collections are well within budget with total taxes up 2.78% this year, an increase of $95,411.
Bentonville’s tax revenue is off $277,593 so far this year. Sales tax revenue declined 6.47% in May, after jumping 20% in April. It’s been a volatile year in Bentonville’s collection reports with broad swings in both directions. Revenue continues to lag last year by 7.8%. City officials remain upbeat and expect collections to normalize in the coming months.
Sales tax revenue has a strong correlation with consumer sentiment. Looking at the March indices for U.S. consumers the reading for consumer sentiment dipped slightly as shoppers held a less hopeful view of the overall economy. At the same time the U.S. Consumer Confidence reading hit a six-year high as this survey found consumers to be moderately upbeat about future job prospects, but less optimistic about income growth.
“Overall, consumers expect the economy to continue improving and believe it may even pick up a little steam in the months ahead," according to a statement from Lynn Franco, director of economic indicators at the Conference Board.