Year-to-date tax collections down in Fort Smith, Sebastian County

Fort Smith city directors will head into 2011 budget hearings with sales tax collections — the bulk of revenue for the city’s general fund — below 2009 levels and below budget estimates.

Each of the city’s 1% sales taxes (1% for streets and 1% for water and sewer projects) collected $1.584 million in July, up a scant 0.02% from the same period in 2009. The collections were down 0.7% compared to budget estimates. (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 to cities in October are from taxes collected in August and transferred by merchants to the state in September However, the city records the October remittance from the state of taxes collected in August on its September report.)

For the first nine reporting months of 2010, each of the 1% taxes have collected $14.145 million, down 1.85% from the same period in 2009. That year-over-year rate of decline has dropped from 7% for the first two months of 2010, 6.79% for the first three months of 2010, 5.71% for the first four months, 4.36% for the first five months and 2.09% for the first eight months.

The city’s portion of the one-cent countywide sales tax was $1.193 million in the September report, down 5.94% from the same period in 2009. For the first nine reporting months of 2010, the city has collected $11.308 million on its portion of the countywide tax, down 2.76% from the same period in 2009. Previously, the countywide year-over-year rate of decline has dropped from 5.6% for the first two months of 2010, 5.39% for the first three months of 2010, 4.79% for the first four months and 2.46% for the first six months.

The countywide tax collection is critical because the revenue is a little more than 40% of the city’s general budget of roughly $40 million. A majority of the general fund budget general supports fire, police and other critical city functions. To date, the revenue from the countywide tax is $321,501 less than in 2009.

Budget hearings are scheduled for Nov. 8, Nov. 9 and Nov. 15. Each hearing will begin at 6 p.m., and will be held in the Community Room of the Fort Smith Police Department.

City Administrator Dennis Kelly said he will have a draft of the budget ready by Nov. 2.

2010 SALES TAX COLLECTIONS
Countywide sales tax collection (with % comparison to 2009 month)
August 2010: $1.193 million (-5.9%)
July 2010: $1.315 million (0.2%)
June 2010: $1.262 million (4.09%)
May 2010: $1.256 million (1.09%)
April 2010: $1.308 million (-3.03%)
March 2010: $1.160 million (-4.90%)
February 2010: $1.140 million (-2.33%)
January 2010: $1.439 million (-8.05%)

Fort Smith sales tax collection
August 2010: $1.584 million (0.02%)
July 2010: $1.627 million (3.99%)
June 2010: $1.578 million (5%)
May 2010: $1.555 million (1.47%)
April 2010: $1.646 million (-2.56%)
March 2010: $1.429 million (-6.28%)
February 2010: $1.398 million (-3.23%)
January 2010: $1.789 million (-9.77%)

PREVIOUS ANNUAL COLLECTION INFO
2% sales tax collection (1% for streets; 1% for water/sewer bonds)
2009: $37.554 million
2008: $41.226 million
2007: $37.858 million
2006: $36.840 million

Fort Smith portion of 1% countywide sales tax
2009: $15.04 million
2008: $16.61 million
2007: $15.15 million
2006: $14.71 million