Fort Smith’s countywide tax revenue growth slows in April, up 11.4% year-to-date

While Fort Smith’s sales tax revenue remained higher than budgeted in April, the amount was much lower than in the past year. The city’s share of the Sebastian County sales tax totaled $1.982 million, up 1.81% compared to April 2021, according to the city’s April sales tax report.

Though revenue was higher than revenue collected from the tax in March and February, the percentage above last year is drastically lower than in previous months. The city’s share of the county-wide tax was $1.671 million in March, up 19.74% from March 2021; $1.727 million in February, up 8.9% from February 2021; and $1.863 million in January, up 17.44% from January 2021.

City Administrator Carl Geffken said while April’s numbers were only slightly higher than budget, unlike prior months that were much higher, it is important to keep in mind all information when looking at the numbers.

“April’s figures represent February’s sales tax collections and February’s weather had several events that lasted for several days that probably affected shopping and sales tax collections,” Geffken said.

City Director Lavon Morton said the sales tax revenue for April 2022 was basically flat with 2021.

“April … is historically a very strong month, and the 2021 April amount was the largest percentage increase in any month of 2021. Being flat in 2022 compared to a very strong 2021 is therefore not surprising,” Morton said.

The countywide sales tax has generated $7.568 million so far this year, 11.44% more than the $6.791 million generated in the first four reporting months of 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.

Fort Smith’s 1% street tax – used for maintenance and new construction on streets, bridges and drainage – generated $2.444 million in revenue in April, up 0.22% from the $2.439 million in April of last year. The budget estimate was what the city made in April of last year, so the revenue is up .22% from the budget estimate.

Again, while April’s collection was higher than collections in February and March, the percentage above budget was significantly lower. March’s collection of this tax was $2.019 million, 5.52% above budget estimate; February’s collection was $2.075 million, 5.52% above budget estimate; and January’s collection was $2.706 million, 16.71% higher than budget estimates.

Through April, the city has collected $9.244 million from the sales tax, 9.23% more than the $8.463 million collected from the tax in the first four months of 2021.

“Overall, April sales tax revenue was very strong as an individual month, but I remain concerned that the Federal Reserve’s actions will eventually lead to slowing of the overall economy and an adverse effect on the local economy and sales tax collections,” Morton said. “The conservative budgeting used by Fort Smith continues to be appropriate.”

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