Northwest Arkansas sales tax revenue continues to rise through August

Continued economic growth in Benton and Washington counties produced record sales tax results for the region’s four largest cities through the first eight reporting months of 2017.

Bentonville, Fayetteville, Rogers and Springdale cumulatively reported sales tax revenue of $5.604 million in August, up 11.01% from the same month last year.

Each city reported solid financial reports led by double-digit growth in Springdale and Bentonville. Each city collects 2% local tax for good and services which is split with 1% going to retire debt and the other 1% being funneled into the city’s general operating budget. This report reflects the latter.

AUGUST REVENUE
• Bentonville: $974 000, up 31.34%
• Fayetteville: $1.816 million, up 4.51%
• Rogers: $1.535 million, up 3.9%
• Springdale: $1.277 million, up 17.2%

August sales tax revenue is connected to consumer sentiment readings taken in June which on a national scale reached a 16-year high. The Consumer Confidence Index rose to 118.9, according to the Conference Board. At that time roughly 31% consumers said business conditions were “good” and one-third believed jobs were “plentiful” The short-term was little more dismal with just 20% expecting business conditions to improve by the year-end.

AMAZON LIFT
Beginning in May purchases from Amazon began to have sales tax added which has helped overall revenue in all four cities according to the mayors who spoke with Talk Business & Politics.

Bentonville Mayor Bob McCaslin said the city’s sale tax gains in recent months have not been tied any one thing, but he knows the Amazon tax is a positive. Last year, Bentonville’s sales tax revenue was down slightly from the prior year, but through the first eight months of 2017, revenue is up 14.32% over the same period last year. McCaslin said that gives the city a $1 million cushion in just seven months. He’s positive on the economy and growth he sees around the city with robust home building, an active tourism scene and expanding culinary options.

He said there is no shortage of places to invest the higher revenue stream given the city’s ongoing growth.

“The Amazon lift is positive and now AirBnB will also begin to add some tax to the city revenue, but it’s also good to see growth coming from a variety of sectors which is a sign our vibrant local economy,” McCaslin said.

Springdale Mayor Doug Sprouse also said Amazon collecting sales tax is helping that city since May. It also helps that a Sam’s Club  opened in late May in the city. Springdale’s sales tax revenue through August totals $9.598 million, up 11.31%, putting just under $1 million extra dollars in the city coffer so far this year.

SLOWER GROWTH
With more retail sales going online the impact to retail shopping centers around the country has been dire. Northwest Arkansas has two large retail shopping areas in Rogers and Fayetteville and the impact on these markets is also apparent, according to Ben Hasan, chief culture, diversity and inclusion officer for Wal-Mart Stores. Hasan spoke at the Northwest Arkansas Business Journal’s annual Forty Under 40 luncheon in Rogers on Tuesday.

Hasan said the Pinnacle Promenade, which opened in 2006 to much fanfare, has not been immune to the turmoil in the retail industry in which he works.

“The food court sits barren and even in this growing region not a month or two goes by when we don’t see a store is closing or being replaced with another retailer,” he added.

That said, Rogers continues to be a hot destination for restaurants and shopping venues, but much of the growth has occurred outside the main Pinnacle Promenade Mall area, with the retail moving south about a mile or so toward the Pleasant Grove Road exit. With Burlington, a second Ross Store and Famous Footwear all locating in southwestern Rogers over the past 1.5 years.

Through the first eight months of this year sales tax revenue in Rogers totals $12.29 million, up 7.13% from a year ago. City officials agree a 7% gain is strong in many regards and say they continue to talk with interested investors looking at Rogers for new venues. Two hot spots already approved and underway include At Home and Dave & Buster’s eatery, each which typically seek out larger metro areas to their locations. The 108,490 square-foot At Home location will feature wall art, rugs, housewares, patio furniture and home furnishings. The store is under construction at 3551 S. 27th St., off of the Pleasant Grove Road exit on Interstate 49. The store is slated to open in the spring of 2018. The Dave & Buster’s Restaurant has been approved by the city and will be located at 2203. S. Promenade Blvd., suite 6000.

Fayetteville is the other major retail area in the region, home to the Northwest Arkansas Mall, Whole Foods and the region’s only Big Lots store. Fayetteville’s sales tax revenue through the first eight months of the year totals $14.164 million, up 4.2% year-over-year which is the slowest growth trajectory of the four cities in this report. Fayetteville’s retail growth has been flat in recent years as many of the new store openings have been in Rogers, outside of the Whole Foods venue. The same has been true in restaurant growth with several eateries in Fayetteville also opening new locations in Rogers such as Tacos 4 Life, Juicy Tails and Newk’s.

Also likely impacting Fayetteville’s revenue is more retail and food eateries going into to neighboring towns of Springdale and Farmington that now can make their purchases closer to home. Sprouse said he’s quite sure the retail grown in Springdale along the I-49 corridor has pulled some business away from its neighboring towns.

SALES TAX REVENUE (January through August)
Bentonville
2017: $8.020 million
2016: $7.015 million
14.32%

Fayetteville
2017: $14.164 million
2016: $13.593 million
4.2%

Rogers
2017:$12.29 million
2016:$11.471 million
7.13%

Springdale
2017: $9.598 million
2016: $8.622 million
11.31%