Fort Smith sales tax revenue declines in September report

BusinessFort Smith

by Tina Alvey Dale ([email protected]) ago 66 views 

Fort Smith sales tax revenue continues the flat path it has traveled most of the year, dipping slightly more in September. The September sales tax report shows the city’s share of the countywide sales tax for the month was 4.23% below the estimate.

The city’s share of the 1% Sebastian County tax between the January and September reports totaled $18.413 million, down 1.27% from the $18.65 million in the same period in 2023. In September, the city received $1.934 million from the tax, down 8.1% compared to the $2.105 million collected in September 2023. The city had budgeted the tax would bring $2.019 million to the city’s coffers for the month.

The September 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 State’s unemployment rate held steady at 3.3% and inflation has decreased to the point where the Federal Reserve is comfortable reducing interest rates. Given these conditions, we hope another interest rate reduction will occur in the future. Another project that will positively affect sales tax collections is the construction work for the (Foreign Military Sales) project along with the bed down of US and Allied pilots and staff. The impact of FMS will begin to be felt in 2025,” said City Administrator Carl Geffken.

Fort Smith’s 1% street tax – used for maintenance and new construction on streets, bridges and drainage – totaled $22.173 million in the first three quarters of 2024, down 1.98% compared to the $22.62 million reported in the same period in 2023. In September, the city received $2.363 million from the tax, down 6.4% from the $2.524 million it generated in September 2024 and down 3.72% from the $2.45 million the city predicted it would generate that month.

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