Fort Smith sales tax revenue for 2020 continues to be strong as November numbers show taxes generating more than 2019. Fort Smith’s portion of the Sebastian County 1% tax generated $16.65 million during the first 11 reporting months of 2020, up 5.7% from 2019 and up 5% from the budget estimate.
Year-to-date revenue from the 1% city street tax totaled $20.69 million through November, up 4.09% compared to the same period in 20219 and up 5.19% over the budget estimates for the first 11 months of the year, according to the city’s November sales tax report.
The November report, which measures September’s transactions, shows the city collected $1.549 million from its portion of the countywide sales tax, up 8.63% from the from the budget estimate and 8.85% compared with revenue from the same time frame in 2019. Revenue from the tax supports the city’s general fund, which includes fire, police and other critical services. The November report shows the 1% street tax revenue at $1.922 million, up 14.53% from the budget estimate and up 7.86% compared with the same period in 2019. The continued strong reports of the sales tax in the city is encouraging city leaders that 2021 will be a positive year.
“Sales tax collections continue to be encouraging, and I am comfortable that the City is in a financial position where we can meet the needs of our residents in normal fashion,” said Director Lavon Morton. “While things overall are a long way from normal, I am hopeful that with the vaccine, we can finally get COVID-19 under some level of control and the ongoing risk to the city’s finances will gradually subside. The most important thing at this point is to make sure that vaccines are distributed and administered to everyone as soon as possible.”
When the COVID-19 pandemic first hit in March, predictions for sales tax revenue was that it would take a dive, not continue to surpass last year’s revenues. In April, City Administrator Carl Geffken told city directors that sales tax revenues for April and May were expected to be 20% of what the city would normally collect due to the COVID-19 pandemic and ensuing state-regulated closures of restaurants, bars and other business. Collections in June and July were expected to be 50% of what the city would normally collect, he said. In total, Geffken estimated a 22% reduction in city sales tax revenue because of the COVID-19 pandemic. To prepare for the reductions, city departments were asked to trim 10% from each of their budgets.
“I was pleased with our November numbers. This continues to bolster my opinion that the Fort Smith economy is strong. I feel we will see a strong December also. With the stimulus payments coming near the end of December and early January, I think that sets the stage for a solid first quarter. We won’t change any plans as of yet, but need to keep an eye on any COVID measures, like lockdowns, etc, that might come from the new presidential administration,” Director Neal Martin said.
In 2019, Fort Smith’s share of the 1% Sebastian County sales tax was $17.265 million, up 2.1% over 2018, and up 5.66% over the city’s budget estimate. The 2019 total was $397,183 more than city officials budgeted to spend within the general fund budget. The 1% street tax generated $21.73 million in 2019, up 1.4% over 2018, and up 6.5% over the budget estimate. The 2019 total was $579,260 more than city officials budgeted to spend on the street tax program.
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