Jonesboro and Craighead County continue to see flat sales tax revenue

Sales and use tax receipt collections in Jonesboro and Craighead County have been flat through the first seven months of the year, but the largest city and county in Northeast Arkansas are operating in the black, as compared to the previous year.

Jonesboro collected $1.523 million in city sales and use taxes during July, a 1.21% increase from the same month in 2017, according to the city. Year to date, the city has collected $10.529 million, a 1% ($106,516) increase from the previous year. However, it’s down when compared to what has been budgeted through the first seven months of the year. The budget projection is down $68,835 (less than 1%) as compared to what had been budgeted.

Sales and use tax numbers are 60 days behind, meaning the latest numbers represent collections from April.

The county has been on a similar trajectory. To date, $11.629 million has been collected in county sales and use taxes, virtually the same as what was collected ($11.602 million) through July, according to the Craighead County Treasurer’s Office.

Craighead County Treasurer Terry McNatt said he hopes that fuel prices will drop and demand for products and services will rise, and that will cause a sales tax collection spike.

“I wish we could pinpoint the exact explanation of why we are seeing the minor fluctuations. We are noticing a strong demand in Northeast Arkansas for more individuals in the workforce,” he said. “I calculated in the last week over 50 businesses in Jonesboro needing employees. I think this economy wants to move forward if we can only get a few major pieces to fall in place.”

Mayor Harold Perrin previously told Talk Business & Politics he thinks one reason the city sales tax numbers have stagnated, despite other economic indicators showing robust growth, is the expansion of online sales. Items sold online are not subject to sales tax collection, and it has had an impact, but Perrin doesn’t know exactly what it has been, he said.

In June, the U.S. Supreme Court, in a 5-4 ruling, reversed a previous high court ruling, opening the door for states to collect sales tax on e-commerce sold goods.

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.