Fort Smith sales tax revenue posts small decline through June

Fort Smith sales tax revenues through the first half of 2024 is cooling from what were record levels in 2023. The June report shows the city’s share of the countywide tax is 0.1% below budget estimates, and the street tax is 0.75% below the estimate.

The city’s share of the 1% Sebastian County tax between the January and June reports totaled $12.264 million, down 0.2% from the $12.288 million in the same period of 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.

Fort Smith’s 1% street tax – used for maintenance and new construction on streets, bridges and drainage – totaled $14.773 million in the first six reporting months of 2024, down 1.5% compared with the $14.997 million in the same period in 2023.

Fort Smith City Administrator Carl Geffken said higher interest rates could have some impact on consumer spending, which translates to tax revenue. He continues to believe the regional economy is healthy.

“The economic indicators in Fort Smith continue to trend positively. Reviewing the data from January 2014 to date, the unemployment rate is amongst the lowest at 3.3%, the number of jobs is the highest at 117,450, and the number of people in the work force has grown to almost the highest amount at 121,449,” he said in a note to Talk Business & Politics.

Recent analysis from The Compass Report noted a healthy regional economy in the first quarter of 2024.

“Overall, the Fort Smith region demonstrated economic stability and potential for growth in Q1 2024. Despite fluctuations in certain sectors and declines in tax collections, the region’s employment growth and improving unemployment rate indicate resilience and a positive trajectory for future economic development,” noted an excerpt from the report, which is produced by the Center for Economic Development at the University of Arkansas at Fort Smith Center.

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