Sales tax receipts in Craighead County and Jonesboro dropped significantly and officials are scrambling to find a reason why. Jonesboro posted $1.283 million in sales and use taxes in the April report a 9.78% ($139,105) drop from April 2017, according to the city.
When combined with county taxes, the decline is about $165,000. For the year, the city has collected $5.95 million, a 1.25% ($75,474) decline from the first four months of the previous year.
Jonesboro Mayor Harold Perrin told Talk Business & Politics his staff is studying the underlying causes of the drop. The mayor doesn’t have a definitive reason why this has happened, but he does have a theory.
“We’re $165,000 below last year, and that’s a big loss,” the mayor said. “The question is, ‘Why?’ I still can’t say for certain, but I’m sure internet sales is a major player. We haven’t lost population. We haven’t lost eating places. I’ve got our staff drilling down to find out why. We’re going to get the list to learn what categories are hurting, but my hunch is internet sales has a major role.”
The April report is on tax revenue from February transactions.
It’s the least amount of sales and use taxes reported in April since 2014 when the city collected $1.265 million. It’s the second consecutive month the city has had a decline. The city projected $1.493 million in collections, meaning the estimate was off 14% ($209,829) for the month. For the first four months, the city is off its budget projection by 3.21%.
Craighead County experienced a similar drop. The county collected $1.447 million, an 8.29% ($130,941) drop, according to the Craighead County Treasurer’s Office. It the least amount of tax collected for April since 2015 ($1.417 million). Since January the county has collected $6.612 million in sales tax and use receipts, a 1.8% decline as compared to the first four months in 2017.
Perrin warned city officials last year he was concerned about the potential impacts of internet sales on sales tax collections. The city set collections records during the past several years and has experienced steady growth for decades. Civic leaders, economists, and others have competing theories as to why Northeast Arkansas has experienced consistent economic growth during the last four decades. The region’s diverse jobs base – agriculture, food processing, health and medical, Arkansas State University, professional services – have had an insulating effect, but economic gains are also tied to population growth.
Since the early 1970s, Jonesboro has grown by about 3% each year, according to the U.S. Census Bureau. As of 2016 the city had about 76,000 residents. Jonesboro was the fifth largest city in Arkansas based on population in the 2010 census. The city is the second largest in terms of geographic size, trailing Little Rock.