Fort Smith sales tax revenues see slight dip in October
by December 19, 2017 11:05 am 214 views
Fort Smith city sales tax revenues were off slightly in October, which is the last reported month of collections and reflects August transactions.
The combined city sales tax tally for October was $3.49 million, 1.5% less than last October’s $3.544 million and 2% above budget for the month. The city sales tax revenue to date is $35.532 million, 0.2% above last year’s $35.472 million and 1.9% above budget. The total revenue to date is $181,602 (street, bond, park/fire) more than the budget estimate.
The city receives 3.25% of the area’s 9.75% sales tax. From that figure, 2% is a city sales tax divvied up between the streets, drainage, and bridges program (1%), collections for bond issues (0.75%), and fire and parks (0.25%, evenly split between the two). The state receives the remaining 6.5%.
The city’s share of the county sales tax for October 2017 was flat compared to last October and 0.7% below budget, with both months turning in collections of $1.376 million. The city’s share of county sales tax revenue to date is $13.995 million, 0.9% above last year’s $13.883 million and 0.1% above budget. The total revenue to date is $11,111 more than the budget estimate.
“Sales tax trends indicate a slight decrease from earlier this year, although totals year to date remain at or just above budget,” said Fort Smith Finance Director Jennifer Walker, adding that franchise fees “have increased to match budget expectations.”
Year-to-date revenue from franchise fees totals $4.967 million, a 15.48% drop when compared to $5.877 million during the same period of 2016. The fees — collected from utilities companies like AT&T, OG&E, AOG, and Cox Cable — is in the midst of a three-year losing streak when comparing 2015, 2016, and 2017.
In 2015, the $6.388 million posted was a 5.77% drop from 2014’s $6.78 million. The 2016 figure went down an additional 8%. However, Walker noted, fees at the end of November are actually just 6% below budget due to timing of fourth quarter payments.
“Finance expects franchise fees to end the year at or slightly above budget.”
On Dec. 5, the city’s Board of Directors voted to increase franchise fee rates from 4% to the maximum allowable rate of 4.25%. The move is estimated to generate an additional $554,000 annually.