Discretionary consumer spending rallied throughout the early summer months pushing sales tax revenues higher again in August among Northwest Arkansas’ four largest cities. Bentonville, Fayetteville, Rogers and Springdale cumulatively reported August sales tax revenue of $6.032 million, up 7.64% from a year ago.
August sales tax relates to consumer spending on goods and services in June. Each city collects 2% local sales tax, half of which is used to retire debt and the other 1% flows into city budgets. This report reflects the latter 1%.
Bentonville continued to lead the region’s revenue gains again in August reporting a 20.4% jump in revenue from a year ago. The city reported sales tax revenue of $1.172 million, the best August on record for the smallest city in this report. Bentonville has generated sales tax revenue in excess of $1 million per month this entire year, also a first in city’s history.
Through the first eight months of this year Bentonville has added $12.164 million to city coffers, creating a year-over-year gain of 52%, or $4.14 million in added revenue. Civic leaders have said the yearly gain is indicative of more retail investment flowing into Bentonville following rooftops from the housing boomlet across the city.
Rogers also reported higher revenue in August, though the city saw growth stall a bit earlier this year. Sales tax revenue totaled $1.638 million in August, up 6.72% from a year ago. It was the best August on record for the city and the third best month so far this year.
Rogers city officials budgeted for $1.433 million each month in sales tax revenue. Through August the city has collected $12.743 million toward its goal of $17.2 million. Revenue is up 3.68% this year over last and city leaders are pleased with the solid gains reported over the past four months. The city also reports revenue this year has been impacted more from $819,000 in rebates changed against receipts. Last year rebates through the same period were roughly $418,000.
Springdale saw a rebound in August sales tax revenue of $1.329 million, up 4.05% from the year-ago period. Last month the city posted a 4.13% decline from the prior year. Mayor Doug Sprouse is pleased with sales tax revenue so far this year as the city reports $9.924 million through August. This represents a 3.4% gain from the same period in 2017. Springdale officials budgeted conservatively with revenue expectations of $14.718 million for the full year. Through August, Springdale is slightly ahead of budget and Sprouse expects the back half of the year will also be in line with expectations.
Fayetteville, the largest city by population in the report, saw a 4.1% increase in sales tax revenue this month. The city added $1.891 million to its operating funds, a solid month for the city. Through the first eight months of this year Fayetteville reports sales tax revenue of $14.732 million, up 4% from a year ago.
City officials budgeted annual sales tax revenue of $21.595 million, about 2% more than last year. Mayor Lioneld Jordan is confident the city will reach its goal as it’s tracking ahead of budget through August.
Consumer sentiment overall has been high and June was no exception as the University of Michigan Consumer Sentiment Index rose slightly to 98.2. Richard Curtin, chief economist with the survey, said one in four consumers cited potential negative impacts of tariffs.
“While tariffs may have a direct impact on only a very small portion of overall GDP, the negative impact could quickly generalize and produce a widespread decline in consumer confidence,” Curtin said June 28. Since that time consumer confidence did slip in July with the Index reading of 97.9. Curtin said again in July the drop was directly related to tariff concerns and trade war fears.
Some of the largest employers in Northwest Arkansas from Walmart to Tyson Foods have expressed concern about the impact of prolonged tariffs. Other companies such as Hershey, Campbell Soup and Coca Cola which also have Northwest Arkansas offices said tariffs are likely to ding profits this year and next. Executive recruiters in the area said while headcount is not expected to be reduced, bonuses could be negatively impacted if sales goals aren’t met and profits fall.
Next month the University of Arkansas Center for Economic Development and Research will hold its annual state of the region luncheon providing more local color on consumer sentiment and potential regional impacts from tariffs and loss of trade.
SALES TAX REVENUE (January through August)
2018: $12.164 million
2017: $8.02 million
2018: $14.718 million
2017: $14.164 million
2018: $12.743 million
2017: $12.29 million
2018: $9.924 million
2017: $9.598 million