NWA November sales revenue slumps

The economy across Benton and Washington counties slumped in September, after a fairly robust spring and summer.

The dip in consumer spending was evident in the 3% decline in sales tax revenue receipts this month, but it doesn’t worry city officials.

The cities of Fayetteville, Springdale, Rogers and Bentonville reported cumulative November tax revenue of $4.29 million, down 2.89% from $4.418 million a year earlier. Three of these cities showed modest gains in revenue receipts this month, but they were offset by double-digit declines in Bentonville.

Each city collects a 2% local sales tax that is split evenly between bond repayment and each city’s general fund. This report tracks the 1% tax going to fund city budgets. The revenue reflects sales in September, creating a two-month lag in the reporting.

November Collections
Bentonville: $599,836, down 27.43%
Rogers: $1,196,429, up 4.24%
Fayetteville: $1,593,272 up 1.33%
Springdale: $900,914, up 3.31%

Denise Land, finance director for the city of Bentonville, has said one month doesn’t make a year. The city’s tax revenue through November is up 9.14%, according to city records.

Rogers continues to report strong sales tax numbers marking 18 consecutive months with revenue in excess of $1 million, according to Casey WIlhelm, finance director for the city of Rogers.

She said new restaurants and retail shops continue to draw traffic and spur on spending in Rogers. It’s been one year since Cabela’s opened in Rogers and Wilhelm said it’s hard to split out the impact from this single venue except to say the city did see a slight revenue increase in November 2012 from the store receipts two months before. She added that it’s one of several attractions that continues to draw consumers to Rogers and Bentonville.

WIlhelm reports that through November sales tax revenue in Rogers is up roughly 8% from a year ago with $12.987 million in sales tax receivables.

In Benton County, sales tax collections totaled $2.829 million in September and are reflected in the counties November revenue report. Revenue dipped 2% from a year ago.

Washington County reported November sales tax revenue of $2.789 million, up 2.12% from a year ago.

Springdale and Fayetteville each report their sales tax revenue through November was up 2.7% and 3%, respectively. City officials said their budgets are in good shape as collections remain steady, despite finicky consumers.

CONSUMER CONCERN
Sales tax revenue is closely tied to consumer sentiment, because consumers don’t typically spend as much money when they are concerned about their jobs or the overall economy.

“Consumer confidence decreased in September as concerns about the short-term outlook for both jobs and earnings resurfaced, while expectations for future business conditions were little changed,” according to Lynn Franco, director of economic indicators for the Conference Board.

Franco noted that consumers’ assessment of business and labor market conditions at that time (September) was a little more positive but they were also concerned the momentum could be sustained in the months ahead.

The government shutdown was also looming when the survey was taken in September and economist feel could have some negative impactive on overall sentiment.

The reduction in SNAP benefits (food stamps) is also taking a $4 billion bite out of the spending which began when the cuts took place Nov. 1. While food is not taxed in many states, consumers reliant on these benefits have less money in their pockets to spend on other things.

The impact to Arkansas recipients is expected to $52 million through September 2014, according to state welfare officials.

NWA GROWTH
Despite weak U.S. job growth, Northwest Arkansas has been the recipient of several new ventures that have or will create some 2,000 new jobs in this region. More than half of those were at Serco, in Rogers, where the average pay is $12 per hour with full benefits.

These local jobs new to the region range from manufacturing, to back office clerical, and sales and are a healthy sign that Northwest Arkansas continues to fare better than many other regions across the country.

Mike Malone, CEO of the Northwest Arkansas Council, recently said that these solid jobs added are yet another catalyst to fuel the ongoing population growth in the two-county area. The council estimates the local metro area will cross the $500,000 population mark by the middle of 2014.