Fort Smith sales tax revenue up almost 13% through August

by Tina Alvey Dale ([email protected]) 278 views 

Fort Smith’s sales tax revenue remained high last month with revenues up more than 11% from August 2021, according to the city’s August sales tax report. The city’s portion of the Sebastian County sales tax totaled $2.007 million in August, up 11.1% compared with August 2021.

August’s report reflects sales tax collections from June.

The countywide sales tax generated roughly $15.568 million in the first eight months of the year, 12.81% higher than the $13.8 million generated through through August 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 sales tax increases are a result of several factors including the major construction projects, both residential and commercial, the increase in the number of restaurants and retail establishments, the continued growth and successes of our education institutions and corporations, and of course, the impact of inflation,” said City Administrator Carl Geffken. “I need to point out that the preparatory work and associated jobs to bring the Foreign Military Sales project to Fort Smith is also beginning to have an impact on our local and regional economy as well.”

Fort Smith’s 1% street tax – used for maintenance and new construction on streets, bridges and drainage – generated $2.48 million in the August distribution, up 11.17% from the $2.231 million reported in July 2021. Through July, the city has collected $19.072 million from the street sales tax, about 10.21% more than the $17.305 million collected through the same time period last year.

“Sales tax collections continued to be strong through August, up double digits for at least the third month in a row  for all funds. This should more than offset any inflation-caused cost increases in most areas and provide some extra funds as a ‘cushion’ against declines in collections later in the year caused by the Federal Reserve’s aggressive moves on interest rates,” said Director Lavon Morton.

Director Neal Martin said the sales tax revenue continues to be strong and continues to be a strong indicator of our economy.

“From watching this during my term in office, it has gotten better each year. Inflation plays a part in it, but a lot of the indicators surrounding our economy are showing strength,” Martin said. “Building permit activity will break all records in 2022, and there are a number of great things on the horizon for our city. This news is further indication that growth is happening in Fort Smith.”

Martin said the city still need to be cautious of events nationally and internationally that always can impact its growth.

“We are still conservative in our budgeting and won’t make any drastic budget changes based on this continued good news,” he 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