Northwest Arkansas sales tax revenue rebounds in March, up 5.3%

by Kim Souza ([email protected]) 306 views 

Sales tax revenue among the four largest cities in Northwest Arkansas bounced back in March rising 5.3% from the year-ago period. Bentonville, Fayetteville, Rogers and Springdale cumulatively reported sales tax revenue of $5.443 million, compared to $5.169 million a year ago. It was the best March on record for the region in terms of total revenue.

March revenue is based on sales tax collected by the four cities for goods sold and services rendered in January. This creates a two-month lag in the data. This report reflects 1% of the local tax collected by each city, money that flows into the general operating budget. Other local tax is used to retire debt and is not part of this report.

Each city posted gains in March, though Fayetteville’s revenue was up only fractionally. Fayetteville reported $1.669 million in sales tax revenue this month, up 0.46% from a year ago. Through the first three months of this year Fayetteville’s sales tax revenue totaled $5.644 million, up 0.74% from a year ago. The March rebound reversed a 2.46% dip in February.

Springdale reported March revenue of $1.174 million, up 10.03% from a year ago. The March revenue was the highest on record for the month. Though the first three months of this year total sales tax revenue is $3.755 million, up $7.22% year-over-year. The strong March showing came on the heels of a $2.37% increase and February and a $10.17% gain reported in January to start the year.

Rogers reported March sales tax revenue of $1.394 million, up 1.93% year-over-year. It was the second best March on record for Rogers. The highest March revenue was in 2017 at $1.411 million. During the first three months of 2019 sales tax revenue in Rogers totaled $4.882 million, up 1.45% compared to $4.812 million a year ago. For the year Rogers’ revenue declined by more than $267,000 from rebates provided to companies in the city.

Bentonville continues to see the widest swings in its sales tax revenue. In March, Bentonville reversed a negative start to the year with its first gains. Sales tax revenue totaled $1.205 million in March, up 12.41% from a year ago. This comes on the heels of a 30.92% drop in February and a 70.47% drop in January. Much of the decline is attributed to tough comparisons of 326.41% gains in January 2018 and 54.69% growth in February 2018. So far in 2019 Bentonville sales tax revenue totals $3.493 million, down 7.5% from the $3.778 million in the year-ago period.

Northwest Arkansas cities fared well considering consumer sentiment in January hit its lowest level since Donald Trump was elected U.S. President. January sentiment lines up with customer spending which is reflected in March sales tax. The University of Michigan consumer sentiment index plunged to a reading of 91.2 in January, blamed largely on the government shutdown which lasted more than 30 days. Consumer confidence rebounded in February after a sluggish start to 2019, according to the Conference Board.

“Consumers expect the economy to continue expanding,” Lynn Franco, the Conference Board’s senior director of economic indicators, said last month.

Retail, also a good metric for sales tax revenue, has been up and down so far in 2019. Coresight Research reported this week U.S. store traffic at retail declined 7.3% year-over-year in February. The average transaction value grew 1.8% and product returns rose 0.1%.

This could point to weakness in the next month’s local sales tax revenue. Coresight reports the Midwest region experienced the largest declines in sales and traffic down 8.5% and 9.2%, respectively. In the South, the declines were smaller with traffic falling 6.3% and sales sliding 2.5% from the year-ago period.