Regional sales tax revenue up in April, Bentonville collections up almost 13%

Combined sales tax revenue among Northwest Arkansas’ four largest cities improved in the April report after falling flat the prior month. Bentonville, Fayetteville, Rogers and Springdale cumulatively reported sales tax revenue of $5.2 million, up 3.6% from the prior year period.

Bentonville again led the region with solid double-digit growth of 12.96% with revenue totaling $1.054 million. City officials say the uptick is likely related to continued investments pouring into the town which has become a destination for locally sourced cuisine, art and outdoor adventures. Outside of Bentonville, sales tax growth has been more muted despite economic development those cities as well.

Springdale reported sales tax revenue of $1.117 million in April, up 3.45% from a year ago. The April revenue follows a 5.67% drop reported last month. Mayor Doug Sprouse recently told Talk Business & Politics there would be ups and downs in the numbers but the city is seeing momentum as investments are announced in health care expansions as well as on downtown entertainment.

Fayetteville reported sales tax revenue of $1.644 million in April, up 0.9%, and the slowest growth this year, but better than the 3.62% revenue decline in April 2017. City officials are optimistic growth will pick up through the summer and into the fall.

Rogers is seeing its slowest growth in several years with April revenue totaling $1.383 million, up 0.59%, but below gains of 4.06% a year ago. That said, the slight gain in April was better than the 3.08% decline the city reported in March. Rogers has yet to report a full 1% gain in any of the first four months of 2018. Casey Wilhelm, the city’s director of finance, said rebates were the reason the sales tax revenue growth is sluggish in the first quarter of this year.

“We have started tracking the rebates in total dollars. Rebates are usually filed when there’s a large construction project. The city has had several large projects and some construction companies wait and file all the rebates at the same time. That’s my guess as to why the numbers are lower,” Wilhelm said.

Each city collects a 2% tax on goods sold and services rendered. Half of that goes to satisfy city debt obligations and the other 1% is funneled into the city’s general fund. This report reflects the latter 1%. Each city also collects a county tax and franchise fees which are not included in this data.

The April sales tax report reflects February sales. The University of Michigan Consumer Sentiment Index was down a bit in February, related primarily to attitudes about the economy. A separate survey the Consumer Confidence metric rose in February to its highest level since 2000. Strong employment was the main driver to that increased optimism, according to The Conference Board’s Director of Economic Indicators Lynn Franco.

“Despite the recent stock market volatility, consumers expressed greater optimism about short-term prospects for business and labor market conditions, as well as their financial prospects,” Franco said in the February report. “Overall, consumers remain quite confident that the economy will continue expanding at a strong pace in the months ahead.”

That optimism was shared by city officials in Northwest Arkansas. Each city in this report budgeted for increased revenue this year and despite the sluggish start most of them remain in good fiscal shape. Denise Land, director of finance, said Bentonville budgeted $11.1 million in sales tax this year and through just four months has received $7.6 million, putting the city $3.7 million ahead of budget. Compared to the same four months last year Bentonville’s sales tax revenue is up 95%.

Springdale recently approved its budget which included expected sales tax revenue of $14.718 million, a gain of 3.39% over last year. Through the first four months of 2018, Springdale has received sales tax revenue totaling $4.619 million, up 1.27% year-over-year.

Paul Becker, Fayetteville’s director of finance, said the city budgeted sales tax revenue of $21.595 million, growing about 2% from 2017. Through the first four months of 2018 sales tax revenue totals $7.246 million, up 3.43% year-over-year.

Rogers city officials budgeted $17.2 million in sales tax revenue this year, up 4.24% from 2017. Despite the sluggish start to this year sales tax revenue reported through April the city is still ahead of budget by roughly $818,000.

THE NUMBERS
Sales Tax (January through April)
Bentonville
2018: $7.6 million
2017: $3.897 million
95%

Fayetteville
2018: $7.246 million
2017: $7.006 million
3.43%

Rogers
2018: $6.195 million
2017: $6.23 million
-0.56%

Springdale
2018: $4.619 million
2017: $4.561 million
1.27%