Sales tax revenue fell more than 2% in Fort Smith’s July report, with year-to-date revenue up 1.6% and 2.2% above the budget estimate. However, franchise revenue could end the year 5% below budget, cutting into some of the sales tax revenue gains.
Revenue in the July report totaled $1.848 million, down 2.24% compared with the July 2016 report, according to information from the office of Fort Smith Finance Director Jennifer Walker. Year-to-date sales tax revenue for the 1% street tax is $12.585 million, up 1.6% compared with the same period in 2016.
The July revenue reflects taxes on May transactions.
The total sales tax revenue to date is $336,686 (street, bond, park/fire) more than the budget estimate, noted Walker’s memo.
The city’s share of the county sales tax with the July report was $1.386 million, down 2.25% compared with the July 2016 report. The city’s share of county sales tax revenue to date is $9.888 million, 2.1% above last year and 1.4% above budget. Total revenue to date is $132,371 more than the budget estimate.
County sales tax revenue is critical because it funds a majority of city functions, including police and fire services.
“Sales tax trends appear to be holding steady at approximately 2% over budgeted amounts and previous year actuals with some variance month to month. Franchise Fees continue to trend below budget expectations,” Walker noted.
Walker said in the note she expects franchise fee revenue to end the year at least 5% below budget.
“Estimated impact is approximately $250,000 to $300,000. County Sales Tax excess will offset approximately $275,000 of the shortfall. Property Tax will likely offset the rest of the shortfall, although Property Tax estimates won’t be available until after November,” noted Walker’s memo.
The city of Fort Smith receives 3.25% of the area’s 9.75% sales tax. From that figure, 2% is a city sales tax divvied up between the streets, drainage, and bridges program (1%), collections for bond issues (0.75%), and fire and parks (0.25%, evenly split between the two). The state receives the remaining 6.5%.
Sales tax revenue is up in several counties in the Fort Smith metro, according to Arkansas Department of Finance and Administration reports. Crawford County sales tax revenue for the first six reporting months of 2017 totaled $6.189 million, up 5.5% compared to the same period in 2016. Franklin County sales tax revenue in the six months was $1.765 million, up 36.2% compared to the same period in 2016.
The Logan County sales tax rate rose from 1% to 2% in January. Tax revenue in the county during the six months totaled $2.182 million, well ahead of the $1.092 million in the same period of 2016. Sebastian County revenue in the six months totaled $15.423 million, up 1.3% compared with the same period of 2016.
PREVIOUS ANNUAL SALES TAX COLLECTION INFO
Fort Smith 2% sales tax collection (1% for streets; 0.75% for 2012 water/sewer bonds; 0.25% for fire and parks)
2016: $42.313 million
2015: $40.76 million
2014: $40.198 million
2013: $38.938 million
2012: $39.21 million
2011: $38.683 million
2010: $37.229 million
2009: $37.554 million
2008: $41.226 million
2007: $37.858 million
2006: $36.84 million
Fort Smith portion of 1% countywide sales tax
2016: $16.58 million
2015: $16.09 million
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