Jonesboro, Craighead County sales tax receipts up more than 5% year-to-date

Economic growth continues in the Jonesboro metro area based on sales tax receipts. The city collected $13.1 million in city sales tax through the end of September, a 5.2% increase as compared to the same time in 2015.

Craighead County has collected $14.5 million in county sales tax receipts through September, a nearly 5.3% increase from last year, according to the county.

The steady rises in city and county income have, in part, compelled city leaders to raise police pay, and raises for firefighters and non-uniformed workers are also under consideration. City accountant Mike Burroughs told Talk Business & Politics elected officials need to be careful. The trends have been good, but at some point the growth could slow, and the city would be forced to eat into its reserves to make payroll.

“If revenues continue to grow we’ll be fine,” he said. “We just can’t know that will always be the case.”

Jonesboro city officials recently passed a new police pay plan that is estimated to add about $600,000 to the payroll this year alone, and it will steadily increase until it adds about $1.5 million to the payroll, annually, by 2022. Officials are considering pay raises for the rest of the city’s workforce, and one proposal under review would add up to $1.4 million more to the city’s payroll this year alone, Burroughs said.

The economy ebbs and flows like a roller-coaster, Burroughs said. The country hasn’t had a major economic downturn since the Great Recession in 2008, but history indicates another one will happen, eventually.

If payroll increases exceed revenue growth, the city has a couple of options. It could use some of its $33 million reserve fund cover the costs, Burroughs said. City officials could layoff workers which happened after the last recession, or they could petition voters to pass a sales tax hike. Burroughs said city employees deserve to be paid more, but said the city needs to adopt a conservative approach to wage growth.

An economic downturn isn’t the only factor that could affect sales tax receipts. Jonesboro’s sales tax base is fueled by automobile and other big ticket sales, Burroughs said. Many of those businesses are located along Red Wolf Boulevard. If a natural disaster struck that part of the city it would have an enormous impact on sales tax revenues, he said.

The city and county’s remarkably consistent sales tax growth is rooted in stable population growth and a diverse economy that doesn’t completely rely on any one business sector like many other communities across the state, Jonesboro Regional Chamber of Commerce Mark Young recently told Talk Business & Politics. The city’s population has grown at about 3% annually since the 1970s, according to census records. It has about 71,000 residents.

Agriculture is the dominant business sector in the Jonesboro metro area, but there are other sectors that comprise the job makeup of the region, Burroughs said. Manufacturing, especially food processing, retail, government jobs, healthcare, Arkansas State University, and others give the region a broad jobs base. If one falters, the other sectors can sustain the downturn. Many cities in the state are reliant on one job sector. For instance, the economy in Hot Springs is dominated by the tourism industry, he said.

City sales tax collections in September totaled almost $1.5 million, a nearly $90,000, or 6.4% increase from the previous year. February gleaned the highest total collected at $1.8 million. Nearly $1.5 million was collected in April, a 13% percent increase from the same month in 2015, and it’s the largest change on a monthly basis when the two years are compared. City sales tax dipped slightly in March, falling .5% and in June when it dropped by 1.7% as compared to the previous year.

JONESBORO SALES TAX HISTORY
2015: $16,591,429
2014: $15,880,099
2013: $15,371,377
2012: $15,022,633
2011: $14,532,544
2010: $13,935,103
2009: $13,953,276
2008: $14,388,497
2007: $13,378,813
2006: $13,070,246