Fort Smith street tax revenue down in June report

Fort Smith’s June revenue report saw collections on the city’s 1% street tax decline, ending seven consecutive months of year-over-year increases.

Each of the city’s 1% sales taxes (1% for streets and 1% for water and sewer projects) collected $1.562 million in the June report, down 1.04% from the same period in 2010. The collections were down 2.51% 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 July are from taxes collected in May and transferred by merchants to the state in June.)

For the first six months of the year, each of the city’s 1% sales taxes collected $9.636 million, up 2.54% compared to the 2010 period and 1.02% above budget forecasts.

Fort Smith’s share of the county 1% sales tax in the June report is $1.22 million, down 3.28% compared to June 2010. The collection was down 6.01% compared to the revenue estimate. For the first six months of 2011, the countywide tax has generated $7.558 million for Fort Smith, down 0.14% compared to 2010 and down 2.96% compared to budget forecasts.

Kara Bushkuhl, director of finance for the city, noted in the collection memo that countywide tax collections received by Fort Smith are $230,327 below budget “which is in line with the amended budget decrease of $220,000.”

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.

New population figures released in the 2010 Census changed how the countywide tax is distributed. Revenue to the city has averaged 69.8% of the total distribution of the Sebastian County 1% tax. However, the city’s 2010 census population is now about 68.6% of the county’s 2010 census population. Countywide tax proceeds in 2010 totaled $21.348 million, with the city’s share reaching $14.892 million.

The city’s portion of property tax collections as of July 25 totaled $3.162 million, up 7.98% compared to the 2010 period. Franchise fees as of July 25 totaled $2.738 million, well ahead of the budget estimate of $6.191 million.

FRANCHISE FEE REVENUE (with % comparison to previous year)
2010: $6.492 million (8.37%)
2009: $5.99 million (-18.68%)
2008: $7.366 million (8.97%)
2007: $6.76 million (-8.72%)
2006: $7.406 million (8.38%)

PREVIOUS ANNUAL COLLECTION INFO
2% sales tax collection (1% for streets; 1% for water/sewer bonds)
2010: $37.229 million
2009: $37.554 million
2008: $41.226 million
2007: $37.858 million
2006: $36.840 million

Fort Smith portion of 1% countywide sales tax
2010: $14.89 million
2009: $15.04 million
2008: $16.61 million
2007: $15.15 million
2006: $14.71 million