Fort Smith sales tax revenue up more than 8% in February report
Fort Smith sales tax reports continue to show a positive picture of the regional economy – and also the ongoing impact of inflation – with sales tax revenues about 8% higher than this time last year.
The February sales tax report shows the city’s share of the 1% Sebastian County sales tax totaled $1.874 million, up 8.57% compared to the $1.726 million reported in February 2022. The city estimated the revenue generated by the tax for the month would be $1.754 million, 6.79% more than last year.
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 first two months of 2023 show revenue from the tax at $4.165 million, 6.4% higher than the $3.915 million the tax reported in the first two months of 2022.
“This was good to see. We continue to see strong performance after a strong 2022. I continue to be encouraged by our strong showing and with our building permit values. Both metrics are on the rise,” said Director Neal Martin.
He said while some of this increase in sales tax revenue can be attributed to inflation and the city should monitor the revenues closely, the reports continue to show good news for the city. The closely watched Consumer Price Index in February that all prices were up 6% compared with the same period in 2022.
Fort Smith’s 1% street tax – used for maintenance and new construction on streets, bridges and drainage – reported $2.25 million in collections in February, up 8.44% from the $2.075 million reported in February 2022, according to the report. The city’s budget estimate for the tax was the same as the actual reported revenue in January 2022, so the collections are 8.44% above the budget estimate. During the first two months of the year, the tax has generated $5.064 million in revenues for the city, 5.9% more than the $4.781 million reported in January and February of 2022.
“The sales tax collections for February continue to point to a strong economy in Fort Smith and the River Valley region. With the recent 0.25% increase in interest rates and the slowing rate of inflation, I am confident that the local economy will continue to grow and provide sales tax growth, especially with the recent approval by the Air Force to locate the Foreign Military Sales program in Fort Smith,” said City Administrator Carl Geffken. “The recent notice regarding the Tyson plant is unfortunate, but the River Valley economy is strong and the coordinated efforts to assist the employees that will be displaced to find new positions is encouraging as well.”
In 2022, Fort Smith’s share of the 1% Sebastian County sales tax was $23.553 million, 9.6% higher than 2021 and up 9.05% from budget estimates for the year. The 2022 total was $1.955 million more than city officials budgeted to spend within the fund budget and $2.06 million, more than the tax brought the city in 2021.
The 1% street tax generated $28.85 million, up 7.4% over 2021 and up 7.65% from budget estimates. The 2022 total was $2.05 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
2022: $28.85 million
2021: $26.667 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
2022: $23.553 million
2021: $21.49 million
2020: $18.246 million
2019: $17.265 million
2018: $17.043 million
2017: $16.691 million
2016: $16.58 million