Fort Smith budget hit with reduced sales tax collections

Consumers continue to spend less in Fort Smith and Sebastian County, based on sales tax figures released Wednesday (Oct. 28) by the city of Fort Smith.

Collections on each of the city’s 1% sales tax was $1.584 million, down 4.33% on August purchases when compared to the same period in 2008. The city’s share of the 1% countywide sales tax was $1.269 million, down 8.06% on August purchases when compared to the 2008 period. (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 October are from taxes collected in August and transferred by merchants to the state in September.)

“For the first three quarters of 2009, the city sales tax is down 7.36% compared to last year. When comparing year to date budget figures, the city sales tax is 5.09% lower than projections. The actual revenue reduction for the street sales tax budget and for the sales and use tax bond budget is $773,393 each,” City Finance Director Kara Bushkuhl noted in a memo explaining the figures.

Bushkuhl also noted that, year-to-date, the county sales tax is down 7.01%. The county sales tax for the first three quarters of 2009 lags behind the projected budget by 4.44%.

More importantly, the actual revenue loss to the General Fund budget is $540,267 to date, with the General Fund supporting fire and police operations.

PREVIOUS COLLECTION INFO
2% sales tax collection (1% for streets; 1% for water/sewer bonds)
2008: $41.226 million
2007: $37.858 million
2006: $36.840 million

Fort Smith portion of 1% countywide sales tax
2008: $16.61 million
2007: $15.15 million
2006: $14.71 million