Fort Smith sales tax revenue down through May

Fort Smith sales tax collections were down again in May with revenues staying below budget for the year. The May sales tax report shows the city’s share of the 1% Sebastian County sales tax was down more than 1% from May 2023 and the 1% street tax also was down more than 1%.

Overall for the year, the city is down less than 1% in sales tax revenue from 2023, which is slightly better than May.

“The May sales tax report continues to show no growth in collections, as we have expected since the start of the year. This will continue until interest rates begin to decrease and/or the impact of the construction at Ebbing (Air National Guard Base) begins,” said City Administrator Carl Geffken.

Ebbing Air National Guard Base, home to the 188th Wing in Fort Smith and co-located with the Fort Smith Regional Airport, was selected in March 2023 by the U.S. Air Force to be the long-term pilot training center supporting F-16 and F-35 fighter planes purchased by U.S. allies participating in the Foreign Military Sales (FMS) program. U.S. Air Force officials have said the earliest planes and pilots from foreign nations could arrive at Ebbing would be in late 2024.

The city’s share of the Sebastian County 1% sales tax totaled $2,012 million in May, down 1.31% from the $2.039 million reported in May 2023, according to the city’s May sales tax report released Wednesday (June 26). In the first five months of the year, the tax generated $10.199 million, down 0.09% from the $10.219 million reported through May 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.

“Overall, it’s less than 2% below budget and slightly improved from last month. Overall city individual department funds are in good shape, except for Utilities. As long as the city remains within a small percentage of budget, I don’t see a need for any changes in planned expenditures,” said Director Lavon Morton. “In addition, sales tax collections should increase as the (Foreign Military Sales mission) construction and related expenditures begin to ramp up over the coming months.”

Fort Smith’s 1% street tax – used for maintenance and new construction on streets, bridges and drainage – generated $2.451 million in May, down 1.6% from the $2.491 million reported in May 2023. Revenue from the tax for January through May was $12.285 million, down 0.57% compared with the same period in 2023.

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