NWA cities report improved sales tax revenue in October

The four largest cities in Northwest Arkansas together added $4.902 million to their coffers in October from the sales tax collected on goods and services in August. Tax revenue among the cities increased 8.9% from the same period in 2013, with all the cities reporting gains.

Following are numbers from the October revenue report.
Bentonville: $930,011, up 9.63%
Fayetteville: $1.579 million, up 4.73%
Rogers: $1.274 million, up 9.32%
Springdale: $1.042 million, up 15.05%

There is a two-month lag in the October revenue report which reflects sales and services in August. Each of the cities in this report collect a 2% local tax, half of which goes to debt retirement and half to the city budget. This report reflects the latter.

The city of Springdale continues to benefit from higher tax revenue leading the region again this month in terms of year-over-year gains. The new Walmart Supercenter in Springdale opened Aug. 13, possibly helping to boost the monthly gains. 

Springdale Mayor Doug Sprouse has said the new Wal-Mart will have a positive impact going forward because he believed the city was losing Walmart sales to a store in Rogers just five miles up Interstate 49. But, he adds that Springdale’s tax revenue has been up nearly all year long, well before the Walmart store opened. Sprouse said he’s not exactly sure why residents are spending more of their money in Springdale but he’s glad to see it.

For Bentonville, October was just the third positive month this year running behind each of the other months — most of which were double-digit declines. Denise Land, finance director for Bentonville, describes the year as a roller coaster ride from the get-go with wide swings in both directions but says the city is in good shape fiscally having budgeted conservatively.

Year-to-date the collections in Bentonville are down 5.8% from 2013, but are still 6.8% higher than in the same period of 2012. Bentonville has grown it’s tax revenue base by 34% since 2009, the start of the recessionary recovery. City officials are pleased with the growth in Bentonville over the past five years and expect another mini boomlet in later 2015 with the opening of the Amazeum.

Rogers has experienced steady growth this year and city officials are pleased with the revenue gains noting that there are no large retail projects planned at this time so sustaining big gains in the future could be challenging. Officials said they do not expect revenue declines as the city remains a popular shopping destination and is also becoming an entertainment center thanks to the Walmart AMP.

Fayetteville reports notable gains of 4.73% in October revenue with students returning to class at the University of Arkansas. Year-to-date, Fayetteville’s gains are up a nominal 1.43%.

Paul Becker, finance director for Fayetteville, said when compared to budget for the month, sales tax collections were up $24,794, or 0.91%. The year-to-date budget impact for the nine months is down a total of $84,392 or -0.37%.

That said, city officials expect a strong November and December showing as the receipts from Razorback Football and Bikes Blues and BBQ, which will be reflected in those results.

Consumer sentiment is a major factor in sales tax revenue and given the two-month lag in the reporting it’s possible to gauge expected sales tax results for the balance of the year. Consumers continue to be a finicky lot. In August, the corresponding month to this report, shows the Michigan sentiment survey’s gauge which measures Americans’ views of their personal finances, rose to 99.8, the highest in seven years, from 97.4 a month earlier. 

The sentiment index slid to 84.6 in September’s final reading and rebounded to 86.4 in the preliminary reading for October. During non-recessionary years the average is 87.4. The average during the five recessions is 69.3. So the latest sentiment number is 17.1 points above the average recession mindset and 1.0 points below the non-recession average, according to the survey board note.

SALES TAX REVENUE (January through October)
Bentonvile
2014: $7,539,243 
2013: $8,004,689
-5.81%

Fayetteville
2014: $13,722,746
2013: $13,529,099
1.43%

Rogers
2014: $11,150,969
2013: $10,697,462
4.24%

Springdale
2014: $8,562,107 
2013: $7,907,108
8.28%