Sales tax revenue continues upward trend in Northwest Arkansas’ four largest cities

by Kim Souza (ksouza@talkbusiness.net) 340 views 

Sales tax revenue growth has been on an up and down track this year among Northwest Arkansas’ four largest cities. Combined revenue grew 1.5% in September to $5.687 million, off compared with the 7.64% growth in the August report and the 4.61% gain in the prior-year period.

Fayetteville and Rogers each reported positive growth in their September sales tax revenue report. Rogers grew revenue to $1.647 million, up 8.34% from the year-ago period. Fayetteville also reported growth of 5.39%, with revenue totaling $1.822 million. Springdale and Bentonville saw sales tax revenue fall by 0.7% and 11.47%, respectively. Springdale had September revenue of $1.256 million, one of its weaker months so far this year. Bentonville’s sales tax revenue totaled $961,577, marking the worst month for the city this year.

Each city collects a 2% local sales tax on goods and services. One-half of that tax goes toward debt reduction. The other 1% flows into the cities’ budgets. This report reflects the later. Revenue reported in September reflects sales in July.

For the first nine months of 2018 the four cities report total sales tax revenue of $55.252 million, up 11.22% from a year ago.

Regional real estate construction continues to bring more new businesses to the four towns. Mervin Jebaraj, director of the Center for Business & Economic Research at the University of Arkansas, recently said consumers have been the reason the U.S. and local economies are growing at a healthy pace. He said consumer sentiment hit an all-time high in August and small businesses surveyed also have among their highest levels of optimism since the Great Recession.

He said concerns about tariffs and higher gasoline prices could put a damper on consumer spending. He said business investment has slowed amid the growing concern from trade disputes between the U.S. and several important trade partners.

“The threat of rising prices is real for consumers and it could play out in consumers reeling in spending for the upcoming holidays. We will have to wait and see how that goes,” he said.

Through the first nine months of the year, Fayetteville reports sales tax revenue of $16.554 million, up 4.51% from the same period in 2017. Recent permits filed with the Arkansas State Health Department indicate the city will soon welcome Big Box Karaoke entertainment venue downtown on Block Avenue. For the sweet tooth, Insomnia Cookies will locate a downtown bakery to 609 W. Dickson St. For burger fans there will be a new alternative eatery located at 3484 W. Wedington as Russellville-based CJ’s Butcher Boy Burgers are setting up shop this fall.

Springdale city reports sales tax revenue growth of 2.92% to $11.181 million through September. That’s slightly ahead of the 2% budget increase expected by city officials this year. Commercial growth around Springdale has slowed a bit in recent months. Jojo’s Island Foods filed a permit with state health department for a new restaurant located at 1219 W. Huntsville Road in Springdale. Pizza Hut also filed a permit for a new eatery at 4230 W. Sunset. The city also recently welcomed a Seven Brew Coffee shop at 2940 W. Sunset.

Bentonville has a had a record year for sales tax revenue growth. The city reports revenue through September of $13.125 million, up 44.13% from a year ago. Investment continues to come into the city according to permits filed with the state health department. Allied Cycle Works plans to set up a bike shop at 401 SE D. St. Jersey Mike’s Subs is now open at 3316 SW I St. Aldi is building a grocery store at SW Westpark and SW I Street which is expected to open early next year. Aldi also has local stores in Rogers, Springdale, Siloam Springs and Fayetteville. The city is also getting Slim’s Chicken restaurant at 1400 Eagle Way.

Rogers has seen one of its slower growth years for sale tax revenue. Through September the city reports sales tax revenue growth 4.19% to $14.39 million. City leaders say revenue is ahead of budget and overall they are pleased with the growth rate which they believe is sustainable.

Rick’s Bakery is now open in Rogers with a new location at 4600 W. Rozell St. Taco Casa has staked out a location at 2207 W. Walnut St., and Duluth Trading Co. is planning a new location at 3200 S. 27th St.. The city also recently welcomed El Cunado Taqueria, which is a second location for the Springdale business. Entertainment venue Topgolf is planning to locate its first facility in Northwest Arkansas near the Walmart AMP in western Rogers. Details on the timeline for that project have not been announced.

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