Fort Smith sales tax revenue had another strong month in March with revenues almost 20% higher than this time last year. The city’s share of the Sebastian County sales tax totaled $1.671 million, up 19.74% compared to March 2021, according to the city’s March sales tax report.
The city’s share of the county-wide sales tax was up 8.9% in February from February 2021 and up 17.44% in January from January 2021. The March report reflects February’s transactions. The county-wide sales tax has generated $5.586 million during the first quarter of 2022, 15.3% more than the $4.844 million generated through March 2021.
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. The tax generated $3.915 million in the first two months of the year, a 13.5% increase from the $3.449 million generated in January and February 2021.
“Fort Smith is approaching the second anniversary of sales tax collections exceeding budget and prior year collections. The continued strength of the Fort Smith, River Valley, and State economies continues to provide higher sales tax collections,” said City Administrator Carl Geffken.
Fort Smith’s 1% street tax – used for maintenance and new construction on streets, bridges and drainage – generated $2.019 million in March, up 16.19% from the $1.738 million in March of last year. The budget estimate was what the city made in March of last year, so the revenue is 16.19% above the budget estimate.
February’s collection of this tax was 5.52% above budget estimate and January’s collection was 16.71% higher than January 2021. The 1% street tax has generated $6.801 million so far this year, 12.9% more than the $6.023 million generated in the first quarter of 2021.
“March was certainly a substantial increase in percentage gain in sales tax for both the city tax and the county tax after much smaller gains in February. This is very positive, however with the Federal Reserve’s attention on reducing inflation, we must consider that a slowdown in the economy may be coming, which could reduce sales tax collections,” said Director Lavon Morton. “Fort Smith may be able to avoid a slowdown because of our particular strong growth situation, but I believe we must remain cautious. The conservative budget we have for 2022 is right for Fort Smith.”
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