Fort Smith January tax revenues hit new high, most area counties see tax gain in 2015

Editor’s note: This story is a component of The Compass Report. The quarterly Compass Report is managed by Talk Business & Politics, and sponsored by Arvest Bank. Supporting sponsors of The Compass Report are Cox Communications and the Fort Smith Regional Chamber of Commerce.
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December holiday shopping may have helped with the 2.67% increase in Fort Smith sales tax revenue and the 3.64% gain in revenue from the city’s portion of Sebastian County’s 1% sales tax. Revenue in the January report set new records.

The recent report shows 2015 revenue from the 1% street tax program was up 1.4% compared to the same reporting period in 2014, and the city’s portion of the countywide tax was up 2.98% for the year.

“The city sales tax revenue in 2015 is 1.4% above last year and 2.2% above budget (estimate). The total revenue in 2015 is $438,660 more than the original budget estimate,” City Finance Director Jennifer Walker noted in the January revenue report. “The city’s share of county sales in 2015 is 3% above last year and 1.2% above budget. The total revenue in 2015 is $195,920 more than the revised budget estimate.”

The countywide tax revenue generated $16.09 million in 2015, the first time above the $16 million mark since 2008 when collections were $16.61 million. The $465,284 in revenue above 2014 collections will help with city funding issues. 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.

Tax revenue from the city’s 1% for streets and 1% for water/sewer bonds and fire and parks totaled $40.198 million in 2015. It is the second consecutive year the revenue topped $40 million, but is below the record $41.226 million collected in 2008.

PREVIOUS ANNUAL COLLECTION INFO
Fort Smith 2% sales tax collection (1% for streets; 1% for water/sewer bonds)
2015: $40.76 million
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
2015: $16.09 million
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

JANUARY REPORT
Fort Smith’s 1% street tax program collected $2.077 million in the January report, up 2.67% compared to January 2015. The amount was 2.68% below 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 February are from taxes collected in December and transferred by merchants to the state in January.)

January’s revenue report also marks a record high for the month, and is also only the third time the city collected more than $2 million from the tax in one month.

Revenue from the city’s portion of the countywide tax was $1.587 million, up 3.64% compared to the January 2015 report and 0.71% above the budget estimate. Unless revised, the January revenue from the countywide tax also marks a record high.

REGIONAL COUNTY, CITY TAX TRENDS
Of the five Arkansas counties in the Fort Smith region, only two – Franklin and Scott – posted sales tax collection declines during 2015 compared to 2014, according to information from the Arkansas Department of Finance & Administration.

Crawford County posted an increase thanks in large part to a one-half cent increase that went on the books in October 2014. Revenue from the tax is helping to fund expansion of the county’s jail system.

Alma, Booneville and Greenwood were some of the regional cities to post sales tax revenue gains for the year. Van Buren, the second largest city in the Fort Smith metro area saw sales tax revenue dip 1.73% in 2015.

Crawford County
2015: $11.47 million
2014: $7.733 million

Van Buren (city)
2015: $7.363 million
2014: $7.493 million

Alma (city)
2015: $2.436 million
2014: $2.387 million

Franklin County
2015: $2.746 million
2014: $2.848 million

Logan County
2015: $2.188 million
2014: $2.056 million

Booneville (city)
2015: $1.23 million
2014: $1.097 million

Scott County
2015: $2.258 million
2014: $2.305 million

Sebastian County
2015: $30.338 million
2014: $29.504 million

Greenwood (city)
2015: $2.472 million
2014: $2.308 million