Fort Smith’s sales tax revenues continued their upward trend as October came and went. Fort Smith’s share of the Sebastian County sales tax was $1.801 million in October, 15.2% higher than the $1.564 million collected in October 2020.
Revenue collected from the city’s share of the Sebastian County sales tax in the first 10 months of the year is up 15.36% compared to 2020. From January through October, the tax has brought the city $17.416 million in revenue in compared with the $15.097 million collected from the tax in the first 10 months of 2020, according to the city’s October Sales Tax report posted Tuesday (Nov. 23).
Numbers in October’s report reflect September’s transactions. 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.
In the 2021 budget, the city budgeted $1.427 million in revenue from the tax in October, bringing the month’s collections 26.19% over budget. City Administrator Carl Geffken said the administration is proposing keeping 2022 sales tax revenue the same as its projected 2021.
“That takes into account the increase in 2021 but we are not increasing it further. We felt it prudent to budget the 2022 revenue at the same level as 2021,” Geffken said. “If sales tax collections dip, we can adjust the budget accordingly and if needed and if sales tax collections increase, we have funds to balance off revenues that may not meet their target.”
Fort Smith’s 1% street tax – used for maintenance and new construction on streets, bridges and drainage – generated $2.182 million in October, a 13.23% increase from the $1.927 million in October 2020. The city’s budget estimated the city would collect $1.789 million in the month, which makes the city’s actual earnings from the tax 21.99% above budget.
So far for the year, the city has collected $21.67 million from the tax, up 15.45% from the 18.77 million collected in the first 10 months of 2020.
City Director Lavon Morton said sales tax revenues are exceptionally good and indicate the local economy is not only strong, but stronger than he expected.
“The increase over budget is somewhat inflated because the budget was very conservative, which was appropriate based on what we knew at the time. I believe the economy will continue to be strong although I expect the growth to level off at some point,” Morton said.
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