Fort Smith tax revenue up 8.6% over estimate in January-February reports

by The City Wire staff (info@thecitywire.com) 51 views 

Fort Smith tax collections have struggled in recent years to post strong gains and two years of gains. But the first two reporting months of 2015 indicate that city revenue could in 2015 build off the 3.24% gain posted in 2014.

The city has collected $3.602 million for the first two reporting months, up 7.78% compared to the same period in 2014. Collections in the two months are also 8.64% above the budget estimate.

The city’s 1% street tax program collected $1.578 million in the February report, up 8.4% compared to February 2014. (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 March are from taxes collected in January and transferred by merchants to the state in February.)

Collections during 2014 of the Fort Smith’s 1% sales tax for the street program topped $20 million for the first time since 2008. The 1% tax generated $20.099 million for the January-December reporting period, up 3.24% over 2013, and was above the budget estimate by 0.78%. However, collections for the past five years have been inconsistent. Revenue from the city’s street tax was down 0.87% in 2010, up 3.9% in 2011, up 1.36% in 2012, and down 0.69% in 2013.

The city’s portion of the countywide 1% sales tax generated $1.226 million in the February 2015 report, up 8.77% above February 2014, and up 5.4% above budget estimates. For the first two reporting months of the year, the city’s portion of the countywide tax revenue is $2.758 million, up 6.78% compared to the same period in 2014. The revenue for the first two months is also 7.1% above the budget estimate.

Fort Smith City Administrator Ray Gosack said the recent tax revenue trend indicates the regional economy is back on stable ground.

“This increase in retail sales combined with strong building permit activity, improved employment trends over last year, increased hotel tax revenues, and higher airport enplanements are all signs that the Fort Smith regional economy is as strong as ever. The effects of the Great Recession appear to be behind us. Business is investing and consumers have greater confidence. 2015 is on track to be our highest year ever for retail sales,” Gosack noted.

He said the improved revenue is not likely to result in budget changes.
 
“We’re still early in the year, so it would be premature to consider any budget additions. Any sales tax revenue beyond our estimates will help the General Fund balance, which ended 2014 one percent less than our target,” he said.

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.

February’s report is an acceleration of the recent trend for the county tax. The city’s portion of the countywide 1% sales tax generated $15.625 million in the 2014 reporting period, up 1.77% above 2013 collections, and up 1.29% above budget estimates.

PREVIOUS ANNUAL COLLECTION INFO
Fort Smith 2% sales tax collection (1% for streets; 1% for water/sewer bonds)
2014: $40.198 million
2013: $38.938 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
2014: $15.625 million
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

Comments

comments