Jonesboro’s astronomical sales tax collections surge continued unabated in June.
The city collected $1.982 million during the month of June, a 31.8% ($477,878) increase from the same month in 2020. Jonesboro Mayor Harold Copenhaver told Talk Business & Politics he’s encouraged with the collections rate this year which is on target to smash the all-time record set in 2020.
“I am pleased by the rise in sales tax collections, and obviously, we are grateful that we have internet sales tax collections. It played a key role during the pandemic and after the loss of the mall. No one wants to pay taxes, but these are serving the citizenry well,” the mayor said.
For the year, the city has collected $11.042 million, a 13% ($1.270 million) uptick from the previous year. City officials said in late 2020 they would budget conservatively due to the COVID-19 pandemic this year. To date, the city is 11.5% ($1.134 million) ahead of budget projections.
The 31.8% surge is the second highest monthly percentage increase for the city in at least 10 years, according to city records. It was only topped by a 33.5% increase that was collected in May 2021. The wild fluctuation can be partly attributed to the COVID-19 shutdowns that impacted the city, region, and state starting in late March of 2020. Many businesses, schools and other public offices were shuttered. Recent stimulus payments to individuals and businesses also contributed to the rise in sales tax collections, according to officials.
Copenhaver said he’s aware of the fluctuations in numbers and a downturn or correction in the coming months cannot be ruled out.
“There is concern about the coming months, because as we know, we have begun to peek our head out from the pandemic, and these past months obviously were affected by the infusion of federal relief aid,” the mayor said. “We budgeted conservatively in January, and still had to call up $6 million in reserves. So if we come in $1 million or even $2 million under budget, I’m very grateful. But we still have to find resources, and I’m using our political connections in D.C. and Little Rock to help find those resources.”
Sales tax numbers lag by 60 days meaning the numbers released were collected two months prior. Economists consider sales tax collections as a leading economic indicator, one that can show how a local economy can be expected to perform in the short-term.
Despite the warnings about a potential slowdown in collections, Copenhaver said he remains optimistic as Northeast Arkansas’ hub city heads into the second half of the year.
“I am also grateful to the business community in their tireless efforts to keep going, and in some cases thriving, through this pandemic. I know it took a toll on them, physically and fiscally,” Copenhaver said. “All in all, we are fortunate, and we have many reasons to count our blessings right now.”