Revenue with key sales tax for Fort Smith dips lower through August report

Fort Smith sales tax revenue continues the flat path it has traveled most of the year. The August report shows the city’s share of the countywide sales tax is 2.6% above the estimate, the best it has been since March. The street tax came in 0.9% below its estimate.

“Total sales tax collections for August were $6,976,123 or $7,750 over budget. The 0.50% decrease in interest rates will hopefully begin to spur economic activity in Fort Smith and the River Valley over the next several months and the Federal Reserve indicated that additional interest rate cuts are forecast. This will also help consumers with large purchases, including homes and vehicles, which should increase future sales tax collections,” City Administrator Carl Geffken wrote. “Flat sales tax collections have been expected, and we should begin to see signs of growth in 2025.”

The city’s share of the 1% Sebastian County tax between the January and August reports totaled $16.479 million, down 0.4% from the $16.545 million in the same period in 2023. In August, the city received $2.059 million from the tax, down 3.2% compared to the $2.128 million collected in July 2023. The city had budgeted the tax would bring $2.007 million to the city’s coffers for the month.

The August report indicates spending in July. 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 county sales tax came in at 2.57% over budget and is now over budget for the year. That is a positive development and hopefully, the above budget collections will continue,” said City Director Lavon Morton. “The other sales tax categories are less than 1% below budget for both the month and the year, but that level allows us to fund all critical programs for the City.”

Fort Smith’s 1% street tax – used for maintenance and new construction on streets, bridges and drainage – totaled $19.81 million in the first eight months of 2024, down 1.4% compared to the $20.096 reported in the same period in 2023. In August, the city received $2.458 million from the tax, down 2.8% from the $2.529 million it generated in August 2024 and down 0.89% from the $2.48 million the city predicted it would generate that month.

“We’re pretty much flat compared to our projections across-the-board, which is OK. We had a record-breaking 2023, and 2024 is following along the same path,” said City Director Neal Martin.

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