August report sales tax revenue up in Fort Smith, below budget estimate

For the third month in a row, Fort Smith sales tax collections have surpassed the same month last year. But even with the increase in revenues, sales tax receipts are still below expectations for the year.

The city's sales taxes (1% for streets and 1% combined for water and sewer projects and fire and parks and recreation) collected $3.27 million in the August report. The figure is 0.74% above the same month last year, but 1.66% lower than budgeted.

For the first eight months of the year, the total tax collections including the August report from the city's sales tax collections are up 1.37% from the same period last year but off budget by 1.04%.

(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 August are from taxes collected in June and transferred by merchants to the state in July.)

Collections so far in the 2014 reporting period of the city's sales taxes were $26.63 million, up from collections of $26.271 million during the same period in 2013. The same eight months in 2012 saw collections of $26.587 million, while 2011 saw collections of $25.919 million. The city sales tax for fire and parks did not begin collecting revenues until 2012.

Total collections of the Fort Smith city sales taxes in 2013 was $38.938. Collections in 2012 totaled $39.21 million, just ahead of the $38.684 million collected in 2011. The 2011 collections were 3.9% above the 2010 revenues of $37.23 million.

Fort Smith's share of the countywide sales tax in the August report was $1.283 million, down 11.02% from last August when the city's share of the county sales tax revenues was $1.442 million. The figure was also 11.44% below revenue estimates of $1.449 million.

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.

In an email to the Fort Smith Board of Directors, Finance Director Kara Bushkuhl said August's county sales tax figures may be below estimates due to an unusual period the year before.

"For an unknown reason, there was a large increase in August 2013 and the budget for 2014 was based upon actual received each month during 2013.  For the 8 months, the county tax is 0.5% below last year and 0.96% below budget.”

She added that property tax collections of $2.669 million to benefit the general fund were "on track to meet the estimated revenue for 2014.”

She also noted that franchise fees, which includes fees collected on cable bills, were $3.435 million through Sept. 23, adding that the "next large payments are due 10/31/14 so we will know more about this revenue after those payments are received.”

Bushkuhl told the Board during its Tuesday (Sept. 23) study session that work on the budget was well underway and city staff was working to ensure both cost of living raises and merit raises, but said other requests by city departments were likely to be cut in an effort to balance the budget for Fiscal Year 2015.
www.thecitywire.com/node/34833

PREVIOUS ANNUAL COLLECTION INFO
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