Fort Smith tax revenue posts double-digit percentage gains

Sales tax revenue for the city of Fort Smith started 2022 on the same upward momentum of 2021.The January sales tax report shows the city’s share of the 1% Sebastian County sales tax was up more than 17% from January 2021 and the 1% tax for city streets was up more than 16% from the same time last year.

The city’s share of the Sebastian County sales tax totaled $2.188 million, up 17.44% compared to January 2021, according to the January sales tax report. Because the budget estimate was what the city saw in January 2021, that share was also up 11.26% from the budget estimate.

The city’s share of the countywide tax is closely watched 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 $2.71 million in January, up 16.71% from the $2.319 million in the first month of 2021, according to the report. Again, the budget estimate was what the city made in January last year, so the revenue is 16.71% above the budget estimate. The January report reflects December’s transactions. While it is unclear how much of the gain is attributable to inflation, city officials cited economic growth for the increased revenue.

City Administrator Carl Geffken said January’s sales tax figures show the continued strength of the Fort Smith metro region and the state’s economies, noting 2022 is the third year in a row for the year-over-year increases to occur in January.

“We continue to work on economic development projects with the Chamber of Commerce and the Fort Chaffee Redevelopment Authority, and we will also continue to monitor our sales tax revenues for impacts to current events,” Geffken said.

City leadership agreed that sales tax revenues 16.7% above the record-setting tax revenues in 2021 is a good start to the year.

“Yes, 2022 is off to a very good start for sales tax collections. I am optimistic about finally leaving Covid behind in 2022 and the continuing positive things happening in the Fort Smith area that should result in a continuing strong economy,” said City Director Lavon Morton.

Director Neal Martin said he was also happy with trajectory, but cautioned that the city needed to be mindful of its finances.

“We still need to be conservative in spending and we’ve done that the past few years. Being able to provide city services efficiently and reliably will continue to be the goal of the board,” Martin said.

In 2021, Fort Smith’s share of the 1% Sebastian County sales tax was $21.055 million, 15.4% more than 2020 and up 18.14% over the city’s budget estimate. The 2021 total was $3.23 million more than city officials budgeted to spend within the general fund budget. The tax has posted year-over-year gains over the past several years, but 2021’s jump was the largest seen during recent years.

The 1% street tax generated $26.134 million in 2021, up 15.4% over 2020 and 17.42% over the budget estimate. The 2021 total was $3.877 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
2021: $26.134 million
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
2021: $21.055 million
2020: $18.246 million
2019: $17.265 million
2018: $17.043 million
2017: $16.691 million
2016: $16.58 million