Fort Smith sales tax revenue up year-to-date

Fort Smith sales tax collections in the city’s September report were down 0.27% compared to the 2010 period, with September only the second month in the 2011 reporting year to show a decline.

Each of the city’s 1% sales taxes (1% for streets and 1% for water and sewer projects) collected $1.58 million in the September report, down 0.27% from the same period in 2010. The collections were down 1.75% 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 October are from taxes collected in August and transferred by merchants to the state in September.)

For the first nine reporting months of the year, each of the city’s 1% sales taxes collected $14.539 million, up 2.79% compared to the 2010 period and 1.27% above budget forecasts.

Fort Smith’s share of the county 1% sales tax in the September report is $1.245 million, up 4.32% compared to September 2010. The collection was up 1.38% compared to the revenue estimate. For the first nine months of 2011, the countywide tax has generated $11.402 million for Fort Smith, up 0.83% compared to 2010 and down 2.01% compared to budget forecasts.

Countywide tax collections are down primarily because of a distribution change related to the 2010 census. Revenue to the city has averaged 69.8% of the total distribution of the Sebastian County 1% tax. However, the city’s 2010 census population is now about 68.6% of the county’s 2010 census population. Countywide tax proceeds in 2010 totaled $21.348 million, with the city’s share reaching $14.892 million.

The countywide tax collection is critical because the revenue is a little more than 40% of the city’s general budget of roughly $42 million. A majority of the general fund budget general supports fire, police and other critical city functions.

FRANCHISE, PROPERTY TAX COLLECTIONS
Franchise fee revenue recorded in the report was $4.812 million, up 1.63% compared to the $4.735 million for the 2010 period.

The revenue, with the largest sources of revenue coming from utility use, is erratic from year to year. In 2010 the revenue totaled $6.492 million, up 8.37% from the $5.99 million in 2009. However, franchise fee revenue in 2009 totaled $7.366 million. (See chart below.)

Companies paying franchise revenue include OG&E, Arkansas Oklahoma Gas Corp. Cox Communications (Fort Smith TV Cable), Arkansas Valley Electric and AT&T.

Property tax revenue through Oc. 10 totaled $6.214 million, up 27.8% compared to the  $4.859 million collected through Sept. 17, 2010. The city collected $11.105 million from property tax collections in 2010, and $10.884 million in 2009.

City officials estimate property tax revenue will total $12.132 million in 2011.

FRANCHISE FEE REVENUE (with % comparison to previous year)
2010: $6.492 million (8.37%)
2009: $5.99 million (-18.68%)
2008: $7.366 million (8.97%)
2007: $6.76 million (-8.72%)
2006: $7.406 million (8.38%)

PREVIOUS ANNUAL COLLECTION INFO
2% sales tax collection (1% for streets; 1% for water/sewer bonds)
2010: $37.229 million
2009: $37.554 million
2008: $41.226 million
2007: $37.858 million
2006: $36.840 million

Fort Smith portion of 1% countywide sales tax
2010: $14.89 million
2009: $15.04 million
2008: $16.61 million
2007: $15.15 million
2006: $14.71 million