Northwest Arkansas sales tax revenue inches higher in April reports

The four largest cities in Northwest Arkansas reported $4.388 million in sales tax revenue last month, inching up just 1.82% from the year ago results.

Sales taxes received in April reflects sales tax collected in February. The cities of Bentonville, Rogers, Springdale and Fayetteville each collect a 2% sales tax on goods and services. Half of that is used to retire debt and 1% is funneled into cities’ budgets. This report reflects the latter.

In April, Bentonville reported $843,828 in sales tax revenue, up 4.23% from a year ago. While the results pleased city officials, they were not near the 20% increase recorded from April of last year. 

Denise Land, city finance director, has said that Bentonville routinely sees wide swings in its sales tax revenue month-to-month, but that is not a concern. The first four months of revenue this year have been up and down compared the prior year period:
• 24.33% in January
• -5.83% in February
• 12.04% in March
• 4.23% in April

Mayor Bob McCaslin said conservative budgeting each year has meant the city is in strong fiscal shape despite the ebb and flows in sales tax revenue swings. 

Rogers reported sales tax revenue of $1.171 million, a gain of 2.03% from a year ago. So far this year the city’s total tax revenue is up 6.74% over the same period in 2014.
City officials expect a strong spring and summer season noting that collections are running well ahead of budget so far this year.

By way of comparison, it has been about one year since businesses in Benton County began selling liquor which was believed to have been part of the reason the 2014 numbers were stronger. More than 24 liquor stores have opened in Benton County over the past 18 to 24 months.

In Fayetteville sales tax revenue rose 0.19% in April to $1.459 million. April marked the first sluggish month for sales tax revenue across the city, which Mayor Lioneld Jordan said has been strong behind improved consumer confidence and low unemployment.

Fayettteville’s sales tax revenue was up 6.65% in January, 9.28% in February and 11.89% in March over the prior-year periods, so city officials were not concerned about the nearly flat results in April. 

The city of Springdale also saw modest sales tax growth in April, compared to what its recorded in the prior three months.

“We can’t complain, our sales tax continues to improve as more businesses are opening across the city and the local economy’s growth appears strong,” Mayor Doug Sprouse recently told The City Wire.

Springdale had sales tax revenue of $914,548 in April, up 2% from the year-ago period. So far this year the city’s sales tax is up 14.3% over the same period last year and running well ahead of budget.

Consumer confidence is closely tied to sales tax and University of Michigan sentiment index fell to 95.4, the first decrease in seven months during February, the month comparable to the time the April sales tax was generated. One other metric that occurred in February was an uptick in fuel costs, which has been trending lower since the end of 2014. Prices at the pump climbed 31 cents a gallon in February on a refinery issues, which should be factored into consumer attitudes at that time.

“Ultimately, the strong job environment and strong U.S. economy are playing a big role in supporting consumer confidence overall,” said Jennifer Lee, senior economist at BMO Capital Markets.