Sales tax revenue up almost 10% in top four Northwest Arkansas cities

by Kim Souza ( 543 views 

The four largest cities in Northwest Arkansas reported sales tax revenue in the September report up 9.95% over the year-ago period. Bentonville, Fayetteville, Rogers and Springdale cumulatively reported $6.253 million in sales tax revenue, with Bentonville up 35.28%, Springdale up 6.71%, Fayetteville up 4.27%, and Rogers up 3.93%.

Each of the cities collect at least a 2% tax over the state sales tax. Each city applies 1% of their local sales tax to their annual budgets. This report reflects that 1%. The September tax revenue is from taxes on sales and services in July, creating a two-month lag in the reporting.

Bentonville has reported four straight months of double-digit growth in sales tax revenue partially rebounding from four months of weak revenue in the first half of the year. Through September, Bentonville sales tax revenue was $11.31 million, down 13% from the $13.125 million reported in the same nine months of last year. Last year, Bentonville had a record year of sales tax growth at 37.9%. City officials do not expect to top that in 2019.

Rogers reports sales tax revenue of $15.016 million through September, which includes almost $1 million in rebate offsets the city has had through August. Rogers officials budgeted for $18.4 million this year and with three months to go expects to reach that goal. Rogers Mayor Greg Hines has said the city is in strong fiscal shape and with Top Golf and Salt Grass Steak House slated to open in early 2020 the city remains an attractive place for business.

Fayetteville reported sales tax revenue of $16.719 million through September, down roughly 1% from the $16.554 million in revenue reported a year ago. Last year Fayetteville saw its sales tax revenue grow 4.6% from the previous year. In 2019, city officials expect flat to modest growth results.

Springdale had the second strongest results among the four cities in September. Sales tax growth for the city has been sporadic this year with double-digit growth to start 2019. Through September Springdale reports sales tax revenue of $11.605 million, up 3.79% from the $11.181 million reported in the year-ago period.

Consumer sentiment has been strong throughout the summer and into the fall with the nation and region still experiencing very low unemployment and only modest inflation. Economists with Wells Fargo Securities said given recent trade concerns with China, sentiment held up with a positive 92 on the University of Michigan Index to start the month of September.

Richard Curtin, chief economist for the Surveys of Consumers, said 38% of all consumers made spontaneous references to the negative impact of tariffs, the highest percentage since March 2018. He said those who negatively mentioned tariffs also held more negative views on the overall outlook for the economy as well as anticipated higher inflation and unemployment in the year ahead.

The National Retail Federation expects consumers will spend freely this holiday season, baring no economic shock. Through August, restaurant sales across the U.S. are up 4.1% this year, according to the National Restaurant Association. The trade group said 57% of operators reported increased same-store sales in the second quarter. However, only 39% reported increased traffic.

Overall consumer spending had been strong through July according to the U.S. Department of Commerce. City officials across Northwest Arkansas said they expect to see decent growth in sales tax revenue this fall thanks to Bikes, Blues & Barbecue which takes place later this month, a slew of craft fairs and Razorback fans who trek to Fayetteville for football Saturdays through November.