Fort Smith tax revenue flat through April report

Fort Smith sales tax collections were down again in April, keeping the revenue relatively flat for the year. The April sales tax report shows the city’s share of the 1% Sebastian County sales tax was down almost 2% from April 2023 and the 1% tax for city streets was down 2.5%.

Overall for the year, the city is down about 1% in sales tax revenue from 2023, but city officials are taking it in stride.

“I don’t know if concerned is the right word, but I want to see continued growth. 2023 was a record year, so I understand it being down a little bit. We want to continue to do things that stimulate the economy and cause folks to be comfortable about purchasing goods and services, but coming off a record setting year, and a string of good years in a row, we are bound to level off,” said City Director Neal Martin. “There is still plenty of time in the year to make that up.”

The city’s share of the Sebastian County 1% sales tax totaled $2.096 million in April, down 1.89% compared to the $2.136 million reported in April 2023, according to the city’s April sales tax report released Thursday (May 23). In the first four months of the year, the tax generated $8.187 million, up 0.07% from the $8.181 million reported through April 2023.

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.

“April’s sales tax collections are 2% lower than budget and lower than 2023, but overall sales tax collections in 2024 are comparable to 2023 with flat growth. We expected this and continue to expect this through the end of the year,” said City Administrator Carl Geffken.

Fort Smith’s 1% street tax – used for maintenance and new construction on streets, bridges and drainage – generated $2.541 million in April, down 2.54% from the $2.607 million reported in April 2023. Revenue from the tax for January through April was $9.833 million, down 1.3% from the $9.964 million collected in the first four months of last year.

“The lower sales tax revenue is a concern. At the same time, we know that FMS construction and related activities should drive additional sales tax revenue in future months. Administrator Geffken watches these numbers carefully and makes adjustments as necessary,” City Director Lavon Morton noted in a statement. “The City continues to be in a solid financial position except for Utilities, which does not receive sales tax revenue. The needed water related construction has no funding at this point, and this will become a serious issue if the Board does not pass the water rate increases proposed by our consultant.”

In 2023, the city received $24.648 million in revenue from the city’s share of the countywide tax. The 2023 revenue was $806,742 more than city officials budgeted to spend within the fund budget and $3.095 million more than the tax generated in 2022. The tax has posted year-over-year gains for the past five years with 2022 revenue up 9.6% over 2021. Fort Smith’s 1% street tax generated $29.924 million in 2023, up 4.23% over the budget estimate.

PREVIOUS ANNUAL COLLECTION INFO
Fort Smith 1% sales tax collection for streets
2023: $29.924 million
2022: $28.65 million
2021: $26.667 million
2020: $22.66 million
2019: $21.73 million
2018: $21.503 million
2017: $21.204 million

Fort Smith portion of 1% countywide sales tax
2023: $24.648 million
2022: $23.553 million
2021: $21.49 million
2020: $18.246 million
2019: $17.265 million
2018: $17.043 million
2017: $16.691 million