Fort Smith sales tax revenues are down for first two months of 2018

Fort Smith sales tax revenues launched 2018 with a two-month losing streak. According to data released by the city on Friday (March 24), the state’s second largest city trailed January and February performances from 2017, a year in which it achieved record revenues of $42.4 million.

In January, the 2% city sales tax — which includes 1% for the street program, 0.75% for bond issuances, and 0.25% split evenly between the parks and fire departments — totaled $4.138 million, or 3.63% less than the previous January’s $4.296 million. The total also was 5.4% below budget expectations.

February didn’t fare much better with receipts totaling $3.104 million against $3.155 million, a 1.65% drop from the previous year and 3.47% below budget for the month.

Year-to-date revenues totaled $7.242 million, or 2.8% below 2017’s $7.451 million through the same period and 0.8% below budget, with total revenue falling $331,539 less than the budget estimate.

The city’s revenue fell short on the county sales tax side as well with missed expectations for January, February, and year-to-date. For January 2018, the city grossed $1.636 million against $1.678 million the previous year, and for February, added $1.242 million, or 0.98% less than February 2017’s $1.254 million. Revenue to date was $2.878 million, or 1.9% below $2.932 million from the previous year and about $84,646 off from the budgeted estimate.

“Overall, we are running about 3% behind our sales tax targets for the first two months,” said Fort Smith Finance Director Jennifer Walker. “Finance will be monitoring closely, and if this develops into a trend, we will bring budget adjustment recommendations to the Board of Directors.”

On franchise fees, those are paid quarterly and will be reported on in April, Walker said. Final 2017 revenue from franchise fees totaled $5.945 million, a 1.16% improvement from 2016’s $5.877 million. 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.

As for property taxes those “are loaded to the fourth quarter and will be reported on beginning in May,” Walker said.

Fort Smith was later than other cities throughout the state reporting sales taxes for the first two months due in part to implementation of its $5 million Enterprise Resource Planning (ERP) software slated to be complete by the end of 2018. Walker said the city’s new ERP system “will allow us to monitor revenue trends closely, and as we fully implement new reporting features, the format of these reports may change to become easier to understand and access.”

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)
2017: $42.408 million
2016: $42.313 million
2015: $40.76 million
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
2017: $16.691 million
2016: $16.58 million
2015: $16.09 million
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