The largest Northwest Arkansas cities each reported sales tax revenue growth in the October report, which is a reflection of sales in August. Bentonville, Fayetteville, Rogers and Springdale together reported October sales tax revenue of $6.92 million, up 14.82% from a year ago, the largest monthly gain in 2019.
Each city reported growth, with Fayetteville, the largest of the towns topping $2.015 million this month, up 4.21% from a year ago. Springdale, the second-largest city by population, reported sales tax growth of 8.8% this month with total revenue of $1.419 million. Rogers reported $1.753 million in revenue, up 6.62%, while Bentonville reported revenue of $1.731 million, up a whopping 51.36%.
Each city collects local taxes on top of the state sales taxes. This report reflects 1% of their local sales tax which is directed into the respective city budgets.
With 10 months of data already reported by the cities this year, each looks to be in a sound fiscal condition relative to budget projections and revenue received and rebates charged. Rogers is the only city of the four to report their rebate charges. Through September, Rogers reported rebates of $1.019 million, that offset the cities sale tax revenue. Rebates are trending higher this year with large projects such as Top Golf now under construction.
Rogers budgeted for $18.4 million in sales tax revenue this year, an increase of 6.97% from a year ago. Through 10 months of 2019, Rogers has collected $16.77 million in sales tax revenue. The city is 91% of the way to its annual goal with two more months of collections to report.
Springdale budgeted $15.56 million in sales tax revenue, projecting 5.72% year-over-year growth in 2019. Through October, the city has collected $13.025 million, up 4.32% from the year-ago period. With just two months left in 2019, Springdale is 84% of the way toward the city’s annual budget goal.
Fayetteville Mayor Lioneld Jordan expects modest sales tax revenue growth between 4% and 5% for the full year so the city will need to make up some ground in the back half of 2019. Last year Fayetteville reported sales tax revenue of $22.218 million, up 4.58% from the prior year. Through 10 months of 2019, the city’s sales tax revenue totals $18.734 million, or 81% of the annual goal. Year-over-year, Fayetteville’s sales tax revenue is up 1.33% from the same period in 2018.
Bentonville is the city with the widest swings in month-to-month revenue and 2019 has been no exception. After a record year in 2018, the city began 2019 with a 70% dip in January and a 30% decline in February revenues. This put the city behind to start the year. But in the past five months, Bentonville has reported double-digit growth. Through October the city has collected $13.042 million, with just two months left in 2019. Revenue is down 29% from the same period last year, but still within the city’s fiscal budget guidelines. The city is not expecting 2019 to outperform the record year of 2018 when revenue topped $20.706 million, a gain of 37% from the prior year. Bentonville city officials set aside $2.5 million in funds for rebates in 2019 which can take up to 12 months to be charged.
The National Retail Federation remains bullish as consumers are still in the driver’s seat for the overall economy. Holiday sales are expected to top $730 billion this year, up roughly 4%, according to the NRF estimated released earlier this month. The chief economist for the trade group, Jack Kleinhenz, said consumer fundamentals are strong.
“Consumer confidence overall is positive though it moves sideways at times. There are probably very few precedents for this uncertain macroeconomic environment,” Kleinhenz said. “There are many moving parts and lots of distractions that make predictions difficult. There is significant economic unease, but current economic data and the recent momentum of the economy show that we can expect a much stronger holiday season than last year. Job growth and higher wages mean there’s more money in families’ pockets, so we see both the willingness and ability to spend this holiday season.”