The four largest cities in Northwest Arkansas had combined sales tax revenue of $6.787 million in the August report. Revenue rose 3.4% from a year ago and reversed the downward slide of the prior two months.
The August report reflects local sales tax spent on goods and services in June, creating a two-month lag in the report. Bentonville, Fayetteville, Rogers and Springdale each collect local sales taxes on top of the state tax. This reports 1% of the local tax which is funneled into the cities’s respective budgets.
With federal stimulus checks sent to many consumers in early June and the unemployed collecting $600 a week in enhanced federal benefits, spending began to return. Also many restaurants and salons reopened along with retail stores who were deemed non-essential during the shelter-at-home edict from state and federal health officials.
Retailers like Walmart, Home Depot, Lowe’s and Target each reported better-than-expected second quarter results which included the months of May and June. The retailers each said consumers were out in their stores and continuing to shop online and pick-up at retail locations.
Three of the four cities in this report has positive revenue growth. Bentonville’s revenue totaled $1.375 million, down 10.49% from the $1.537 million in the year-ago period. Bentonville’s August report marked the third month of double-digit revenue declines for the city.
With the largest employer in the nation based in Bentonville and thousands of corporate office employees working from home, many eateries in town have remained closed because their business was centered around Walmart’s lunch crowd. Other large attractions in the city such as Crystal Bridges Museum of American Art , Amazeum, Walmart Museum and The Momentary were also closed for several months and just recently reopened, all of which has taken a toll on revenue.
Through the August report, Bentonville’s sales tax revenue totaled $10.205 million, up 1.94% from $10.01 million reported a year ago. Walmart has said corporate employees will continue to work from home until Jan. 31, not the best of news for local businesses that depend on the offices being open. Hotels in the area also report sluggish revenue given there is less travel out of Northwest Arkansas Regional Airport with Walmart’s buyer meetings conducted virtually.
There was no Walmart shareholders meeting this year and the Open Call event, also usually held in June, was postponed to the fall and will be conducted virtually.
Walmart’s executive team said last week sales in U.S. stores began to slow at the end of July as the enhanced unemployment benefits began to expire. The retail giant also said back-to-school shopping will take place over several months this year as many families are keeping children at home this fall for virtual classes.
Springdale reported the strongest sales tax revenue in the region with the August report up 16,51% from a year ago. Revenue totaled $1.544 million, by far the strongest August on record for the city. It was also the highest month of revenue reported this year and a marked improvement over the 0.49% increase in July. Through the August report sales tax revenue totaled $11.112 million, above the $10.264 million in the same period last year and represents a gain of 8.26%.
City officials have said sales tax revenue results have been better-than-expected given the uncertainty in the economy related to COVID-19. Springdale is the only city among the four that has not had reported a revenue decline any month this year.
“We budgeted for a 4% increase this year and that conservative prediction was made prior to COVID-19. We are elated to see the better than 8% growth so far. Of course we don’t know the future holds,” said Mayor Doug Sprouse. “This August report was the best in the city’s history.”
Sprouse attributed the gains to the city’s 81,000 to 83,000 residents who are home and ordering online and also spending locally. He said the city has not had to make cutbacks, even though that planning was done. He said the city is in strong fiscal shape.
“Now that we get the tax for online sales and people are home, we are starting to see all the money Springdale has bled out to surrounding cities overt the years,” Sprouse said.
The retail centers of Rogers and Fayetteville have been hit hard this year with many of the stores and entertainment venues closed and several now just serving take-out food. In August, Rogers reported revenue of $1.823 million, up 1.22% from a year ago. This comes on the heels of declines of 1.85% in July and a 19.45% decline in the June report.
Top Golf is open and busy, but the Walmart AMP next door is closed with no concerts for this year. Walk-On Sports Bar is open and the new SaltGrass Steakhouse has yet to set an opening date. Culver’s Hamburger eatery is to be built on New Hope Road near Pinnacle Promenade and open in 2021. Rogers’ retail landscape is looking more vacant with the pending closures of Stein Mart, Pier One, Justice and Gordmans.
Rogers sales tax revenue through the August report totals $13.572 million, up 2% from $13.304 million reported in the same period a year ago. The 2020 results through July include rebates of $802,710. City officials in Rogers budgeted $19.9 million in sales tax revenue this year. Through the August report, the city is 68% of the way to reaching that budget. For the remaining four months the city’s sales tax revenue needs to average $1.582 million to reach that budgeted goal.
Fayetteville’s August report showed sales tax revenue of $2.042 million, up 7.51%. It was the best August on record for Fayetteville and only the second time this year where revenue exceeded the $2 million level. The August report also reversed declines of 0.78% and 11.3% reported in July and June, respectively.
While the University of Arkansas did welcome back students on campus this week, many classes will also be taught virtually. The UA football season will kick-off Sept. 26 at home against Georgia. No tailgating is allowed and there will be limited capacity inside the stadium so economic impact from this revenue generator will likely be lower than normal.
Through the August report, Fayetteville posted sales tax revenue of $15.25 million, up 2.9% from the $14.819 million in the year-ago period, but below the city’s goal of 5% growth.