Sales tax collections in Fort Smith were down again in the May report, with the weak jobs market in the Fort Smith metro area likely putting negative pressure on consumer spending.
For the first five reporting months of 2013, the collections are 1.35% below 2012 levels and 4.17% below budget.
Each of the city’s 1% sales taxes (1% for streets and 1% for water and sewer projects) collected $1.583 million in the May report, down 0.49% from the same period in 2012, and 3.51% below 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 June are from taxes collected in April and transferred by merchants to the state in May.)
For the first five reporting months of 2013, each of the 1% sales taxes generated $8.271million, down compared to the same period of 2012.
Fort Smith’s share of the county 1% sales tax in the May report is $1.238 million, down 1.43% compared to May 2012. The collection was down 3.88% compared to the revenue estimate.
For the first five months of 2013, the countywide tax has generated $6.425 million for Fort Smith, down 1.6% compared to 2012 and down 4% compared to budget forecasts.
The countywide tax collection is critical because the revenue is a little more than 40% of the city’s general budget of roughly $42 million. A majority of the general fund budget general supports fire, police and other critical city functions. The dip in collections has resulted in city officials seeking 4% budget cuts from all departments.
According to The Compass Report for the first quarter of 2013, weak sales tax collections and ongoing declines in the labor market were cited as reasons for relative economic decline in the quarter.
Jeff Collins, the economist who conducts data collection and analysis for The Compass Report, said sales tax collection data suggest local retail activity is struggling to return to more stable patterns seen before the sharp national economic downturn experienced during 2009.
Collins said the regional economy is somewhat stable, but “a return to trend growth does not appear to be imminent.”
Sales tax collections in central Arkansas have seen slight declines, but collections are robust in Northwest Arkansas.
The four largest cities in Northwest Arkansas reported healthy sales tax collections in the most recent report. Bentonville, Rogers, Springdale and Fayetteville received more than $4.453 million in sales tax revenue in June. Cumulative collections rose 10.8% over the year-ago period.
PREVIOUS ANNUAL COLLECTION INFO (Fort Smith)
2% sales tax collection (1% for streets; 1% for water/sewer bonds)
2012: $39.210 million
2011: $38.683 million
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
2012: $15.279 million
2011: $15.15 million
2010: $14.89 million
2009: $15.04 million
2008: $16.61 million
2007: $15.15 million
2006: $14.71 million