Fort Smith’s sales tax revenue rose again in March, coming in around 1% higher than the same period in 2020, but collections were one of the lowest monthly collections in the past 12 months.
The city’s share of the Sebastian County sales tax totaled $1.395 million in March, according to the city’s March sales tax report, up 1.31% compared to March 2020. In the 2021 budget, the city budgeted $1.377 million for the month, which is what the city made from the tax in March 2020, so the revenue is up 1.31% from the budget. Over the past 12 months, the only other month in which the city collected less than $1.4 million from the tax was May 2020, when the tax brought in $1.381 million for the city. Numbers in the March report reflect February transactions.
Fort Smith City Director Lavon Morton said the numbers reported show February sales that were affected by the weather.
“I expect the previous months’ trend to resume next month, which will reflect March sales,” Morton said.
Director and Vice Mayor Jarred Rego said March still represented another solid month of sales tax revenue for the city.
“Any month where revenue exceeds the thoughtful numbers budgeted by city administration and department heads is an indicator of a healthy local economy,” Rego said.
The city’s share of the 1% Sebastian County sales tax and the 1% tax for city streets rose more than 15% in February when compared to the same time last year. February of this year was marked with record cold temperatures and snowy conditions unusual for the region.
So far this year, the city has collected $4.844 million, a 9.5% increase from the $4.424 million collected in the first quarter of 2020. The city’s share of the countywide tax is important because the revenue provides money for the city’s general fund budget, with much of that budget paying for police, fire and other essential city services.
Fort Smith’s 1% street tax – used for maintenance and new construction on streets, bridges and drainage – generated $1.738 million in March, a 0.72% increase from the $1.725 million in March 2020. Again, the budget estimate was what the city made in March last year, so the revenue is just less than 1% above the budget estimate. The month’s collection were lower than most in the past 12 months, with only May 2020 coming in lower with $1.694 million collected from the tax.
So far for the year, the city has collected $6.024 million, up 8.9% from the $5.531 collected in the first quarter of 2020.
While Director Neal Martin said he did not feel March’s sales tax revenue would affect the budget, it will be something the board will monitor.
“I was looking for an increase similar to the two previous reports (10% and 15%) and that was not reflected in these numbers. We need to see if the economy is cooling, but I anticipate a rebound next month. We should continue to see the effect of the stimulus payments to families,” Martin said. “I still feel our economy is strong and we will continue to monitor in the short and medium term.”
In 2020, Fort Smith’s share of the 1% Sebastian County sales tax was $18.246 million, up 5.7% over 2019, and up 5.52% over the city’s budget estimate. The 2020 total was $953,824 more than city officials budgeted to spend within the general fund budget. The tax has posted year-over-year gains for the past five years, but 2020’s jump was the largest seen during that time period.
The 1% street tax generated $22.66 million in 2020, up 4.02% over 2019, and up 6.08% over the budget estimate. The 2020 total was $1.298 million more than city officials budgeted to spend on the street tax program.
PREVIOUS ANNUAL COLLECTION INFO
Fort Smith 1% sales tax collection for streets
2020: $22.66 million
2019: $21.73 million
2018: $21.503 million
2017: $21.204 million
2016: $21.156 million
Fort Smith portion of 1% countywide sales tax
2020: $18.246 million
2019: $17.265 million
2018: $17.043 million
2017: $16.691 million
2016: $16.58 million