Sales tax revenue holding up in the Fort Smith metro despite early COVID-19 impacts

by Michael Tilley ([email protected]) 278 views 

With the exception of Van Buren, sales tax revenue in the Fort Smith metro is not yet showing significant declines previously expected because of economic disruptions related to COVID-19.

Fort Smith’s share of the 1% Sebastian County tax during the first five reporting months of the year is $7.225 million, 1.46% more than the $7.16 million during the same period of 2019. The year-to-date revenue is 1.46% above the city’s budget estimate. The city’s share of the countywide tax in the May report was $1.38 million, down 1.67% from May 2019. Revenue from the tax supports the city’s general fund, which includes fire, police and other critical services.

The 1% street tax for Fort Smith’s street, bridge and drainage projects totaled $9.001 million for the first five reporting months of the year, down just 0.36% compared with the same period in 2019. Revenue for the tax in the May report was $1.693 million, down 4.3% from the May 2019 report.

The May report reflects March transactions. The June report will show impacts from April, the first full month the Arkansas economy was partially closed because of the pandemic.

Fort Smith City Director and Vice Mayor Kevin Settle said he is confident the revenue will remain on trend, but said city officials continue to monitor how the virus may change economic trends.

“After our initial concerns about our revenue going down due to COVID-19, our sales tax is holding flat during this pandemic. Our sales tax revenues are almost even to our budget. I am optimistic about the revenues as we move forward over the next few months, but it will depend on how we, as a community, deal with COVID-19,” Settle said. “Administration, along with department heads, have made changes to their 2020 budget and expenditures to ease any concerns with our revenues during the 2020 year.”

City Director Lavon Morton said the city should continue to focus on keeping a close eye on expenses.

“I am certainly both surprised and relieved with the level of sales tax receipts reported in recent months. Hopefully, the City will not suffer the dramatic decline in sales tax revenue that we feared. I believe it is prudent to continue to control expenses to the extent possible and the departmental budget reductions mandated by Administrator Geffkin in the early stages of the COVID-related business shutdown was appropriate,” Morton noted.

Sebastian County during the first four months of the year – the latest data available – collected sales tax revenue of $10.424 million, up 2.5% compared to the same period in 2019, according to the Arkansas Department of Finance and Administration (DFA).

Sales tax revenue in Van Buren, the second-largest city in the metro and largest city in Crawford County, totaled $2.272 million in the first four months of 2020, down 16.6% from the same period in 2019, according to DFA figures.

Following are revenue figures and comparisons in three other metro counties.
• Crawford County
Jan.-April 2020: $4.666 million
Jan.-April 2019: $4.23 million
up 10.3%

• Franklin County
Jan.-April 2020: $1.245 million
Jan.-April 2019: $1.269 million
down 2%

• Logan County
Jan.-April 2020: $1.673 million
Jan.-April 2019: $1.548 million
up 8%

PREVIOUS ANNUAL COLLECTION INFO
Fort Smith 1% sales tax collection for streets
2019: $21.73 million
2018: $21.503 million
2017: $21.204 million
2016: $21.156 million
2015: $20.308 million

Fort Smith portion of 1% countywide sales tax
2019: $17.265 million
2018: $17.043 million
2017: $16.691 million
2016: $16.58 million
2015: $16.09 million

Facebook Comments