Northwest Arkansas sales tax revenue rebounds in March

The March sales tax report was an improvement for the four largest cities in Northwest Arkansas with combined sales tax revenue of $5.119 million, up 18% from a year ago. Bentonville led the growth with a 27% gain.

The March revenue is generated from a 2% local tax on goods and services rendered in January, created a two month lag in the reporting. Half of the revenue collected goes toward reducing debt in the respective cities and the other 1% is funneled into each city’s general budget. This report reflects the latter 1%. Following are March report numbers for the four cities.
• Bentonville: $981,245, up 27.25%
• Fayetteville: $1.595 million, up 12.68%
• Rogers: $1.411 million, up 18.96%
• Springdale: $1.131 million, up $17.84%

SPRINGDALE GROWTH POTENTIAL
The March revenue was a record for the region, in what is typically a soft month. City leaders told Talk Business & Politics the good weather and continued population growth is helping to fuel the monthly gains.

The Bentonville number is likely an anomaly and there could be rebates in the coming months to offset this gain. Bentonville has budgeted annual revenue of $10.1 million, or $841,666 per month. The city is $438,635 ahead of budget through March. Rogers is also trending ahead of budget by $729,000 through March.

Springdale Mayor Doug Sprouse said recently in his State of the City address that 2017 will be a big year for Springdale as the momentum continues. He said the completion of Arkansas Children’s Northwest could be a game changer in terms of economic growth for not only the city but the entire region. The city will soon welcome a new Freddy’s and Tacos for Life restaurants already permitted. Sprouse said a new hotel also is under construction and he expects more restaurants to fill in downtown and on the east side of town in the coming months. He said a strong job market and more disposable income is helping fuel consumer spending in Springdale and the entire region.

“We’re just glad that Springdale residents have more places to spend their money in town today than they have had in the past,” Sprouse said.

Fayetteville continues to see modest growth in sales tax revenue but the 12.68% increase in March is a good sign for the city. A new J.J.’s Beer Garden venue is under construction adjacent to two huge apartment complexes under construction near the Northwest Arkansas Mall. Buffalo Wild Wings recently opened in that area and reports strong traffic from local residents who work in the area.

Consumer sentiment rallied in January, the month that corresponds with March sales tax revenue. The Michigan Sentiment Index rose to 98.5, its highest reading since 2004. The economy underwent a “Trump Bump” post election with a surge in confidence driven by a more optimistic outlook for job growth and the overall economy through the next five years, according to University of Michigan chief economist Richard Curtin.

He said enthusiasm by consumers was based on political promises and not economic outcomes. Since January consumers have remained confident about the economy, though the index dipped in February only to rebound in March. Curtin said there are bipartisan attitudes among consumers with Republicans seeing optimism which promotes discretionary spending. He said the Democrats are uncertain and that makes consumers more cautious spenders. This combination will result in uneven spending gains over time and across products.

SALES TAX REVENUE (January-March reports)
Bentonville
2017: $2.963 million
2016: $2.727 million
8.65%

Fayetteville
2017: $5,376 million
2016: $5.112 million
5.16%

Rogers
2017:$4.855 million
2016:$4.209 million
15.34%

Springdale
2017: $3.481 million
2016: $3.139 million
10.89%