Fort Smith sales tax collections see double-digit drop
by September 1, 2009 5:13 pm 56 views
There was a time the sales tax collections in Fort Smith and Sebastian County did not reflect the troubles seen in other areas around the country.
That time is over.
Commerce in the city and county during June saw huge decreases compared to the same period in 2008. (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 back to the cities in August are from taxes collected in June and transferred by merchants to the state in July.)
The city’s portion of the Sebastian County sales tax was $1.312 million, down 14.96% compared to the same period in 2008. The city’s one-cent tax for streets generated $1.564 million, down 18.8% compared to the same period in 2008.
“For the first seven months of 2009, the city sales tax is down 6.84% compared to last year. When comparing year to date budget figures, the city sales tax is 4.77% lower than projections,” City Finance Director Kara Bushkuhl said in a memo.
Bushkuhl also noted that year-to-date figures for the county sales tax are down 6.03%, and are down 3.96% from budget estimates.
While the county and city tax declines of 14.96% and 18.8%, respectively, appear significant, they reflect a 2008 that saw millions of dollars in repair work to commercial and residential structure damage resulting from April and June storms.
When comparing the July city sales tax receipts ($1.564 million) to July 2007 ($1.597 million), the decline is only 2%, and is virtually flat compared to July 2006 ($1.569 million). The city’s portion of the countywide sales tax in July ($1.312 million) was up 2.5% compared to July 2007 ($1.280 million) and up 4.5% compared to July 2006 ($1.255 million).
But Ray Gosack, deputy city administrator, said not all of the decline can be tied to the 2008 repair work.
“Our analysis is that those storms caused the increased sales in 2008,” Gosack said. “But no, I would not say this (2009 collections) is a return to normalcy. We think some of this downturn is because of the economic conditions.”
Part of those economic conditions include a regional unemployment rate that hit 7.7% in July, up from 5% in July 2008.