The local economy across Northwest Arkansas continues to mend as proven by healthy sales tax collections reported by the Arkansas Department of Finance on Wednesday.
Among the region’s five largest retail markets, sales tax revenue rose 14.13% from the previous year, helping city planners stay ahead of their annual budgets in 2012.
The cities of Fayetteville, Springdale, Rogers, Bentonville and Siloam Springs together reported $4.110 million in sales tax collections . A year ago, the same cities collected $3.599 million.
April’s tax revenue reflects February sales remitted to the state in March creating a two-month lag in the city reporting. Each of the five cities collect a 2% sales tax which is divided evenly between the cities’ general operating fund and the repayment of bonds. This report tracks the city’s portion, or 1% of the tax collected.
2012 TAX COLLECTIONS (April)
(Data represents a 1% sales tax, compared to prior year period.)
Bentonville: $694,381, up 10.29%
Fayetteville: $1.37 million, up 18.29%
Rogers: $969,896, up 13.14%
Siloam Springs: $244,935, up 12.1%
Springdale: $812,080, up 12.64%
Kathy Deck, director for the Center for Business and Economic Research at the University of Arkansas, credits the higher sales tax revenue to an improving job market in the region.
“We continue to see a broad-based recovery with hiring particularly strong in the leisure and hospitality sector as well as professional service jobs. When people have jobs they spend more money, which in turns helps push the economy forward. As we see unemployment rates decrease we should continue to benefit from strong sales and hospitality tax collections year-over-year.
The local unemployment rate stood at 6.4% in February, down from 6.9% in the year-ago period. The March jobless numbers for Northwest Arkansas will be released by the Bureau of Labor Statistics Wednesday (May 2).
Higher gas prices are the one wildcard that could derail consumer spending habits in the short-term, Deck said.
“While prices have stabilized of late, we are always one step away from a refinery shutting down or some other supply problem that could push gas prices on up to $4 per gallon,” Deck said,
Of the cities reporting, Fayetteville showed the strongest increase, up 18.29%. But all five posted double-digit gains from a year ago.
City officials attribute the gains to warmer weather compared to February of last year when two major snow storms dumped more than two feet of snow across the region, crippling commerce for more than a week.
In Bentonville, shop owners continue to see steady traffic related to Crystal Bridges visitors. The world-class museum has drawn more than 270,000 visitors since opening Nov. 11, according to Amber Hendrickson, spokeswoman for Crystal Bridges.
Deck said 250,000 was the early estimate for the entire year, which has been accomplished in just a few months.
Springdale is also beaming from a brighter economy to start 2012. Springdale Mayor Doug Sprouse said there are lots of projects on tap this year and the steady revenue source will go along way in helping to pay for them.
With major road work ongoing at Elm Springs Road and I-540 and the future Don Tyson interchange, Sprouse said the revenue is going to fund much needed resources for the city and area residents.
“We are also very pleased with several new restaurants that have recently opened in Springdale. People seem to be more ready and able to invest in business ventures this year and we are certainly glad to be moving in the right direction,” Sprouse said.
CUMULATIVE TAX COLLECTIONS
2012: $3.203 million
2011: $2.629 million
2012: $5.640 million
2011: $5.231 million
2012: $4.241 million
2011: $3.896 million
2012: $3.341 million
2011: $3.031 million