This year the four major cities in Northwest Arkansas have reported yo-yo tax revenue month-to-month, but in July revenue bounced higher topping $4.936 million reported by Bentonville, Rogers, Springdale and Fayetteville. The cumulative gain is up over the $4.406 million in July 2013.
City leaders have said they are not sure where the particularly strong July numbers came from but it’s been that kind of year — unpredictable. The July reports for the four cities were:
• Bentonville, $1.010 million, up 23.9%;
• Fayetteville, $1.572 million, up 4.45%;
• Rogers, $1.328 million, up 12.82%; and
• Springdale, $1.024 million, up 12.94%.
All of the cities collect a 2% tax on sales and services. Those collections are split evenly with 1% going toward debt repayment and 1% going into the cities’ general budget fund. This report reflects the latter. The July tax revenue reflects sales and services rendered in May creating a two-month lag in the reporting.
Bentonville officials report that through July the city has collected about 60% of the budget for this year. Finance Director Denise Land said the financial budget is in great shape even though collections are trailing revenue in 2013. In June, Bentonville’s revenue dipped 26%, only to rebound 23% in July. Land said the roller coaster ride is nothing new, and as long as collections top budget estimates she is content with the rocky ride.
Springdale posted its best month since 2006, bursting through the $1 million monthly threshold on the heels of a strong revenue gain of 12% in June. Mayor Doug Sprouse expects the tax revenue to continue growing though the balance of this year as the new Walmart Supercenter is slated to open this summer. He said the convenient location on the west side of town and I-49 should keep some Springdale shoppers in town that had driven the store in southwest Rogers at Pleasant Grove Road.
Fayetteville city leaders are happy about the 4.5% gain in their July revenue in a year where collections have been flat. Through July Fayetteville reports county and city collections are down more than $90,000 below last year.
Rogers reported a strong month of collections, up 12.8% from a year ago, and considerably better than the flat collections tallied in June. City leaders recently told The City Wire collections are well within the $14 million budget for 2014. Finance Director Casey Wilhelm said the city expects collections to remain strong the balance of this year, on the strength of activity surrounding the Walmart AMP, now in full swing.
Sales tax revenue collections are directly linked to consumer confidence readings and when looking back at the May reading, consumers took a gloomy view on income growth with a conservative and tepid outlook.
The University of Michigan's final May reading on the overall index on consumer sentiment came in at 81.9, down from 84.1 the month before. Survey director Richard Curtin said the main concern expressed by consumers involved dismal prospects for wage growth, which for nearly half of all households meant anticipated declines in inflation-adjusted incomes and living standards during the year ahead. Some 56% of consumers reported that the economy had improved somewhat, though wages lagged behind.
Arvest Bank recently released its first regional consumer sentiment report from surveys completed in May and June. That localized report found Arkansas consumers to be less optimistic than their neighbors in Missouri and Oklahoma. The consumer sentiment index for Arkansas was 67.4, trailing that of Missouri (68.6) and Oklahoma (76.4).
“These new consumer sentiment data indicate that Arkansas can expect continued on-again, off-again growth. Until consumers indicate that they feel confident about their economic futures, personal income growth will be the key to additional spending and a breakout recovery. We will look forward to our next data point to begin telling us about trends in optimism,” Kathy Deck, director for the Center for Business and Economic Research at the University of Arkansas, said in the report.
She said the initial readings indicate that consumers in the region, and especially in Arkansas, are “leery” about overall economic conditions in the near future, although they reported being relatively upbeat about their current financial status.