Fort Smith sales tax shortages for first quarter of 2018 nearing $500,000

Sales tax collections have missed expectations and previous year performances for the first quarter of 2018 by close to $500,000 when combining Fort Smith sales tax and the city’s share of county sales tax revenues.

Jennifer Walker, the city’s finance director, said the city is “running about 2-3% behind our sales tax targets for the first three months.”

“Finance is continuing to monitor closely, and budget adjustment recommendations are being formulated with contingencies up to 5%. We will bring budget adjustment recommendations to the Board of Directors within 60 days if the trend continues,” Walker said.

The city has a 2% sales tax. One percent goes to its streets program while 0.75% is for bond issuances and 0.25% is dedicated equally to the parks and fire departments. Reporting runs on a delay with March 2018 being the last available data. For the month, the streets program pulled in $1.67 million against budgeted expectations of $1.709 million, a shortfall of around 2.25%. The performance also was 0.4% off from last March. Year-to-date, the city pulled in $5.292 million, roughly $213,271 (or 3%) under the $5.506 million budgeted and 2% off from the first three months of 2017.

The city has been going through changes to its reporting style with implementation of its Enterprise Resource Planning (ERP) software program and advised that reports could change and “become easier to understand and access” in the months ahead. Unlike past reports, however, data was not provided on the 0.75% and 0.25% numbers. But together, they equal the amount of the streets program and follow the same percentages, with $3.969 million going to bond issuances and $1.323 million going to parks and fire (or about $661,500 for each department). Overall, total revenue to date across all three areas is $351,483 less than the budgeted estimate.

The city’s share of county sales tax revenue also fell short against budget and previous year expectations. For March, the $1.311 million was about $19,000 short from the $1.331 million budgeted. For the year, the shortage was around $104,082. Total revenue to date is $4.189 million against a budgeted amount of $4.294 million and a 2017 performance of $4.248 million, declines of 2.4% and 1.4%, respectively.

Franchise fees, which are paid quarterly, will receive their first report when April numbers are in, and property taxes will be loaded to the fourth quarter and reported beginning in May.

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