Trend still positive for Fort Smith sales tax revenue through August

by The City Wire staff ([email protected]) 45 views 

After posting wide variations for the past three reporting months, city of Fort Smith sales tax revenue moderated in the August report to a 2.29% gain for city sales taxes and a 2.84% gain for the city’s portion of a countywide tax collection.

The countywide tax revenue that feeds the city’s general fund generated $1.319 million in the August report, up 2.84% and 3.15% over the budget estimate. The January-August collection is $10.783, a welcome 4.2% increase over the same period in 2014 and up 4.51% over the budget estimate.

Revenue from that tax funds a majority of the city’s general fund budget, with much of that budget paying for police, fire and other essential city services. the Fort Smith Board of Directors and city staff are working on ideas to address a looming shortfall in the city’s contribution for police and fire employee pensions.

The January-August increase in the city’s portion of the countywide collections has added $465,706 more to the budget than during the same period in 2014.

The city has in the first eight reporting months of 2015 collected $12.321 million on its 1% street tax program and the same amount on a 1% tax divided between bonds, Fire Department and the city’s Parks Department. The amount is up 5.66% compared to the same reporting period in 2014, and is 6.5% above the budget estimate.

The city’s 1% street tax program collected $1.691 million in the August report, up 2.29% compared to August 2014. The amount was 3.12% above the budget estimate. (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.)

For the first seven months of the year, the street tax revenue has produced $752,286 more than the same period of 2014. Collections of the tax were up 8.4% in the February report, flat in the March report, up 8.81% in the April report, rising to 11.66% in the May report, falling 5.47% in the June report and rising again to 10.74% in the July report.

TAX TRENDS
Countywide sales tax revenue to the city hit a record in 2008 with $16.61 million. It fell to $14.89 million in 2010, but has posted four consecutive years of gains since 2010, with the 2014 total reaching $15.625 million.

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.

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