Fort Smith sees dip in tax collections; countywide tax up 1.74%

Fort Smith and Sebastian County sales tax collections continue to be trend-proof, with the October report showing a 0.3% dip in Fort Smith and a 1.74% gain countywide.

Each of the city’s 1% sales taxes (1% for streets and 1% for water and sewer projects) collected $1.584 million in September, down 0.3% from the same period in 2009. The collections were down 1.02% compared to budget estimates. (Because the state of Arkansas has a two-month delay in reporting collections back to the cities, the city of Fort Smith — for budgeting purposes — has historically reflected the collections on a one-month delay. Which is to say, the tax collections remitted to cities in November are from taxes collected in September and transferred by merchants to the state in October. However, the city records the November remittance from the state of taxes collected in September on its October report.)

For the first 10 reporting months of 2010, each of the 1% taxes have collected $15.649 million, down 1.71% from the same period in 2009. That year-over-year rate of decline has dropped from 7% for the first two months of 2010, 6.79% for the first three months of 2010, 5.71% for the first four months, 4.36% for the first five months and 1.85% for the first nine months.

The city’s portion of the one-cent countywide sales tax was $1.232 million in the October report, up 1.74% from the same period in 2009. For the first 10 reporting months of 2010, the city has collected $12.541 million on its portion of the countywide tax, down 2.34% from the same period in 2009. Previously, the countywide year-over-year rate of decline has dropped from 5.6% for the first two months of 2010, 5.39% for the first three months of 2010, 4.79% for the first four months and 2.76% for the first nine months.

The countywide tax collection is critical because the revenue is a little more than 40% of the city’s general budget of roughly $40 million. A majority of the general fund budget general supports fire, police and other critical city functions. To date, the revenue from the countywide tax is $300,410 less than in 2009.

Positive gains in the May-July tax reports suggested collections would begin to show a clear trend in improved consumer spending for 2010 — especially after the first four months delivered negative results. However, the August and October report have also delivered declines in Fort Smith sales tax collections.

Sales tax collections in the region and the city of Fort Smith began to show weakness in the second quarter of 2009. That weakness began to improve in the second quarter of 2010, but slipped somewhat in the third quarter compared to the same period in 2009.

The tax collections, which are good indicators of regional consumer confidence, were down in Crawford, Franklin, Logan and Sebastian counties ($3.077 million in August 2010 compared to $3.247 million in August 2009).

2010 SALES TAX COLLECTIONS
Countywide sales tax collection (with % comparison to 2009 month)
September 2010: $1.232 million (1.74)
August 2010: $1.193 million (-5.9%)
July 2010: $1.315 million (0.2%)
June 2010: $1.262 million (4.09%)
May 2010: $1.256 million (1.09%)
April 2010: $1.308 million (-3.03%)
March 2010: $1.160 million (-4.90%)
February 2010: $1.140 million (-2.33%)
January 2010: $1.439 million (-8.05%)

Fort Smith sales tax collection
September 2010: $1.504 million (-0.3%)
August 2010: $1.584 million (0.02%)
July 2010: $1.627 million (3.99%)
June 2010: $1.578 million (5%)
May 2010: $1.555 million (1.47%)
April 2010: $1.646 million (-2.56%)
March 2010: $1.429 million (-6.28%)
February 2010: $1.398 million (-3.23%)
January 2010: $1.789 million (-9.77%)

PREVIOUS ANNUAL COLLECTION INFO
2% sales tax collection (1% for streets; 1% for water/sewer bonds)
2009: $37.554 million
2008: $41.226 million
2007: $37.858 million
2006: $36.840 million

Fort Smith portion of 1% countywide sales tax
2009: $15.04 million
2008: $16.61 million
2007: $15.15 million
2006: $14.71 million