Sales tax revenue in four largest NWA cities up 3.4% on November commerce

Officials with the four largest cities in Northwest Arkansas are optimistic they will continue to see sales tax revenue growth in 2016 thanks to steady employment and overall business expansion that continues in Benton and Washington counties.

Fayetteville, Springdale and Rogers each posted healthy sales tax revenue in the January report with gains of more than 7% compared to a year ago. Bentonville bucked the trend with revenue falling 14.63% year-over-year. The composite revenue of the four largest cities totaled $4.793 million in January, rising 3.4% from the $4.636 million reported a year ago. This increase comes on the heels of a 9.48% revenue gain across the region throughout 2015. The January report reflects sales tax collections on November transactions.

Each of the four cities collect a 2% tax on goods and services, half of that goes to repay debt and the remaining 1% is funneled into the annual budget. This report reflects the latter.

Following are figures from the January sales tax reports, which shows collections on November transactions.
• Bentonville: $721,889, down 14.63%
• Fayetteville: $1.672 million, up 7.2%
• Rogers: $1.351 million, up 7.26%
• Springdale: $1.047 million, up 7.95%

Given that the January revenue reflects sales in November, city officials were pleased with the results which factor in Black Friday shopping. Bentonville city officials explained the decline in January revenue to rebates on the heels of record growth in December (36%) and November (57%).

All four cities budgeted for continued growth in 2016. In Springdale, one of the fastest growing cities in the country, the City Council approved a 2016 budget allowing for expenditures of about $2.4 million more than it spent in 2015. The city budget allows for $39.8 million in expenditures throughout 2016, compared to the more than $37 million budget in 2015.

The increased spending will be largely covered from expected revenue growth. Springdale Mayor Doug Sprouse said the 2016 budget includes $38.3 million in sales tax revenue. He said while that might be short of actual expenditures that’s to be expected in a growing city.

Fayetteville city officials passed an overall 2016 budget of $147 million for 2016, up slightly from last year. The general fund (operating budget) portion rose 8% to $41.4 million to allow for increased police and firefighter positions. Mayor Lioneld Jordan said the city is continuing in 2016 to ride a surge in tax revenue gains throughout 2015.

Rogers officials approved $45.4 million for general fund expenditures in 2016, up from $43.7 million last year. The city expects it will ring up about $2.5 million more in tax revenue this year over 2015. Mayor Greg Hines has said the city’s growth requires continued investment in infrastructure and services. Most of the increased spending will come from sales tax revenue. Despite the solid returns over the past few years, he said the city continues to budget conservatively.

Bentonville Mayor Bob McCaslin said city staff and elected officials worked on the 2016 budget for five months because the cost of progress is hefty and investment must continue. The city’s 2016 budgeted expenses are about $1.35 million below projected income. Like Hines, McCaslin said the city will continue to be fiscally responsible. He said sales tax revenue, which flows into the city’s general fund, is expected to be $36.4 million in 2016 and will cover expenditures of $35.7 million.