Sales tax revenue across the four largest cities of Northwest Arkansas rallied in the June report, with cumulative proceeds totaling $4.864 million, a gain of 9.92% from a year ago.
Three of the four cities posted double-digit returns over a year ago, while Fayetteville’s sales tax revenue continues to run slightly behind the average. June sales tax is a result of a 2% local tax on goods and services sold in April. Each of the cities in this report uses half of that revenue for debt retirement and the other half is funneled into the city’s annual budget. This report tracts the later.
June Sales Tax Revenue
Bentonville: $913,273 up 12.5%
Fayetteville: $1.588 million, up 7.61%
Rogers: $1.312 million, up 10.81%
Springdale: $1.05 million, up 10.51%
JOBS AND CONFIDENCE
Strong consumer confidence is a catalyst for higher sales numbers across the region this year. Higher wage growth in the local metro area also is a plus, according to Kathy Deck, director for the Center for Business and Economic Research at the University of Arkansas.
“Arkansans know that this is a good time to spend,” Deck said recently in response to the Arvest Bank Consumer Sentiment Survey released Tuesday (June 23). “Low gas prices, low interest rates and slightly higher incomes pushed the buying conditions index all the way to 131.0. Those same conditions mean that Arkansans can also pay down some existing debt or increase their personal savings rates without sacrificing too much in the short term.”
More residents reported in the survey that they had made a major household purchase in the past six months. Four out of 10 Arkansas respondents purchased items such as furniture, televisions and refrigerators in the recent survey. This compared to 34% in the October 2014 survey. Looking ahead, 24% of Arkansas respondents plan to purchase a large household item this summer.
Increased spending in the region is a direct result of higher disposable incomes and some savings that was built up during a more cautious period in recent years. Deck said it doesn’t hurt that above average job growth is also helping the region grow its population at 1.9% annually or by 25 people a day. This is 2.5 times faster than the rest of the country’s 0.75% average.
More people will naturally mean more spending across the two-county area, but another report released last week by the Bureau of Labor Statistics indicates that Benton County had the highest wage growth percentage in the nation in the last quarter of 2014. Average weekly wages rose 9.9% from the fourth-quarter 2013. This compared to the 3.5% increase in the national average weekly wage.
Wages in Benton County rose $90 per week in the last quarter of 2014, compared to the $35 national average.
AHEAD OF BUDGET
The June report adds to what has been a solid half-year among the four cities and region as a whole. Year-to-date cumulative revenue is up 9.82% to $28.865 million, with each of the cities outpacing budget estimates creating a surplus for the back half of 2015.
In Rogers collections are at 54.7% of the city’s total annual budget for 2015. City budget records indicate that 2015 is off to a record first half.
Springdale too, is off to its best year in history with sales tax revenue growth of 13.48% over last year. The city has seen double-digit gains in every month but April, when tax revenue rose just 2.058%
Bentonville has been the most volatile of the cities in this report on a month-to-month basis in 2015. But through June the city has total revenue of $5.286 million, a gain of 12.84% from a year ago. The city reports revenue is more than $550,000 ahead of budget.
City officials in Fayetteville also have plenty to celebrate this year as total revenue through June is $9.61 million, up 7.39% from a year ago. Sales tax revenue is trending 5.5% ahead of budget this year, according to Paul Becker, finance director.
SALES TAX REVENUE (January through June)
Bentonville: $5.989 million, up 12.84%
Fayetteville: $9.61 million, up 7.39%
Rogers: $7.878 million, up 8.39%
Springdale: $5.989 million, up 13.48%