Fort Smith sales tax down slightly, expected to finish 2016 ‘slightly above’ budget forecasts

Fort Smith city sales tax collections tapered off 2% in November 2016 compared to the same period last year and fell short by 2.2% against the month’s revised budget estimates.

Fort Smith Finance Director Jennifer Walker noted that despite the drop, year-to-date revenues are 4.1% above last year and 1.4% above revised budget.

The total revenue to date, which includes 1% for streets, 0.75% for 2012 bond funding, and 0.25% for parks and fire, is $38.842 million — $518,734 more than the revised budget estimate of $38.324 million. The November report reflects tax collections on September sales.

In a memo to Mayor Sandy Sanders, City Administrator Carl Geffken, department heads, and the Board of Directors, Walker said that city sales tax for 2016 is expected to finish the year slightly above budget and forecasts, adding the same for the city’s share of county sales tax, which for November 2016 was 0.9% less than last November and 2.5% below revised budget.

The city’s share of county sales tax to date in 2016 is 3.1% above last year and 1.4% above budget with year-to-date revenue at $15.214 million, or $213,306 more than the revised budget estimate of $15.001 million, Walker said. County revenue funds police, fire, city administration and other critical services.

One-cent street tax revenue for the month of November 2016 was $1.681 million, 2.01% below the November 2015 report and 2.24% below revised budget estimates enacted more than three months ago by the Board to account for lower-than-anticipated revenues.

The total adjusted budget reduction resulting from the Aug. 16 Board of Directors meeting was $1.41 million. Street sales tax took the biggest hit with a $650,200 reduction while bond Issues were next at $495,900. Fire and Parks revenue estimates also fell by $132,150 apiece.

FRANCHISE FEES, AD VALOREM
Franchise fee revenue continue to run below expectations, standing at 24% below budget at the end of November.

”Most of this is due to timing of payments,” Walker said, adding that the city estimates coming coming in at year-end approximately 8% below budget, or $500,000. “This shortfall will be offset by County Sales Tax overages (expected $300,000 excess by year end) and lower than budget spending in the General Fund ($200,000+).”

A large part of the deficiency shows actual revenue from OG&E in the amount of $2.884 million against an estimated revenue of $3.6 million. AOG also ran below expectations with a $643,366 actual against an estimate of $1.202 million.

Ad Valorem (property tax) revenue is trending at or slightly above budget expectations for the year with totals of $12.118 million reported against a budgeted amount of $11.963 million. The revenue represents state turnback for the homestead exemption statute. Receipts for police and fire pension make up a portion of the total — approximately $2.852 million — and are deposited in the Arkansas LOPFI Contribution Fund.

PREVIOUS ANNUAL SALES TAX COLLECTION INFO
Fort Smith 2% sales tax collection (1% for streets; 0.75% for 2012 water/sewer bonds; 0.25% for fire and parks)
2015: $40.76 million (With 91.67% of the year reporting, the 2016 YTD is at 95.29% of the 2015 total.)
2014: $40.198 million
2013: $38.938 million
2012: $39.21 million
2011: $38.683 million
2010: $37.229 million
2009: $37.554 million
2008: $41.226 million
2007: $37.858 million
2006: $36.84 million

Fort Smith portion of 1% countywide sales tax
2015: $16.09 million (With 91.67% of the year reporting, the 2016 YTD is at 94.56% of the 2015 total.)
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