Fort Smith sales tax revenues played catch-up in May with $3.429 million collected from the city’s 2% tax, 1% of which goes to streets, 0.75% to bond issues, and 0.25% divided evenly between parks and fire departments.
The performance was an improvement of approximately 0.4% from May 2017’s $3.416 million. Year-to-date, it moved the city slightly closer to break-even with $17.76 million through the first five months against $17.946 million last year, a decline of 1.04%.
To put the gain in perspective, the city finished April with funds totaling $14.33 million, or 1.4% below the previous year’s tally of $14.529 million. Fort Smith Finance Director Jennifer Walker noted in a Tuesday (July 10) memo, YTD city sales tax revenue is 0.3% ahead or $56,854 (street, bond, park/fire) after revising budget estimates.
In keeping with gains on the city side, the city’s share of county sales tax revenues for May 2018 was $1.353 million, or 0.9% more than last May’s $1.34 million and 2% above the revised budget for the month. Through the first five months, the number remains slightly off at $7.017 million against $7.051 million in 2017, a decline of 0.48% and $26,000 over the revised budget estimate.
“Overall, we are running in line or just slightly better than the revised budget estimates. Finance is continuing to monitor trends closely,” Walker said.
At a June 19 Board of Directors meeting, the Board — acting on recommendations from Walker — agreed to cut revenue expectations for the year by $330,000 (1.93%) from the county side and $1.286 million (3%) from estimated city sales tax receipts. To that point, performance was about $544,747 lower than expected (combined city and county).
Also on Tuesday, Walker provided updates on franchise fees, property taxes, and business license fee collections. Franchise fees (paid quarterly) are at $1.709 million, which is 38% below the budgeted expectation of $2.772 million, but Walker notes that timing of payments are largely to blame and when adjusting for that consideration, receipts are just 0.82% off where they should be ($1.724 million).
Property taxes — reported for the first time in May — are $4.6 million, or 14% above budget when adjusting for the timing of payments. Lastly, the inaugural business license fee payments totaled approximately $347,000, which is 6.6% below the revised budget amount.
“Outstanding accounts will be turned over to a collections agency in the fourth quarter of this year,” Walker said.
At the June 19 meeting, the Board approved a $100,000 downward adjustment to business license fee collections. The fee was expected to raise $425,000 annually to the city’s General Fund, 70% of which goes toward funding the city’s police and fire departments. However, Walker told Talk Business & Politics, most of the revenue was collected in March and it fell short.
“We estimated that we were going to bring in $425,000 for the year, and we’ve only brought in $300,000. We renew business licenses all at once in March, so we already know. Everyone who hasn’t paid their business license fees yet is past due. So we’ve collected 95% of what we’re going to collect.”
In explaining the lower-than-expected total, Walker said there were “a lot of changes, a lot of questions around what constitutes a business license and what doesn’t.”
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