Fort Smith tax collections up 3.38% in April report, down year-to-date

by The City Wire staff ( 10 views 

Sales tax revenues for the city of Fort Smith were up in April, with the revenue gap narrowing in the city for the first four months of the year.

The city's sales taxes (1% for streets and 0.75% for water and sewer projects) collected $2.979 million in the April report, up 3.38% from the same period in 2013.

The total in the April report represents an increase of 0.92% over budget. (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 April are from taxes collected in February and transferred by merchants to the state in March.)

Collections so far in the 2014 reporting period of the two taxes were $11.688 million, while the same period in 2013 saw collections of $11.702 million. The same period in 2012 saw $13.586 million and $12.932 million in 2011.

Total collections in the year 2013 of the two taxes plus the 0.25% fire and parks sales tax were $38.937 million. Collections in 2012 of the two 1% taxes totaled $39.21 million, slightly ahead of the $38.683 million during 2011. The 2011 collections were 3.9% above 2010 collections.

Fort Smith's share of the countywide 1% sales tax in the April report was $1.294 million, up 3.5% from last year's total during the same period of $1.277 million. The collection was up 3.02%, or $38,708, compared to a revenue estimate of $1.283 million for the month.

The countywide tax generated $15.353 million for Fort Smith during 2013, up 0.49% compared to 2012 and down 1.99% compared to budget forecasts. The countywide tax generated $15.279 million in 2012, just ahead of the $15.15 million in 2011, but lower than the peak collection of $16.61 million in 2008.

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 supports fire, police and other critical city functions. The dip in collections compared to budget estimates has resulted in city officials seeking 4% budget cuts from all departments.

The prospect of any budget cuts similar to what happened last year seems to have dimmed with the April report, with revenues appearing to have stabilized. Finance Director Kara Bushkuhl said the report "has a positive trend and is helping to close the gap on the annual revenues."

Bushkuhl said last month that a reduction would be unnecessary, though she said the fire and parks department budgets may need to be adjusted slightly if trends continued, though the April figures appear to show a reversal in trends, at least in the short term.

Fort Smith 2% sales tax collection (1% for streets; 1% for water/sewer bonds)
2013: $38.937 million
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
2013: $15.353 million
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