Sales tax collections up in October

October was a busy retail month in Fort Smith and Sebastian County, with city tax sales tax collections up more than 10% and countywide collections up more than 5% compared to the same period in 2010.

Each of the city’s 1% sales taxes (1% for streets and 1% for water and sewer projects) collected $1.574 million in the November report, up 10.53% from the same period in 2010. The collections were up 8.9% 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 December are from taxes collected in October and transferred by merchants to the state in November.)

For the first 11 reporting months of the year, each of the city’s 1% sales taxes collected $17.696 million, up 3.64% compared to the 2010 period and 2.12% above budget forecasts.

Fort Smith’s share of the county 1% sales tax in the November report is $1.23 million, up 5.54% compared to November 2010. The collection was up 2.56% compared to the revenue estimate. For the first 11 months of 2011, the countywide tax has generated $13.874 million for Fort Smith, up 1.21% compared to 2010 and down 1.63% compared to budget forecasts.

The countywide increase in collections comes even with a change in the distribution formula 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

Year-to-date franchise fee revenue recorded in the report was $5.157 million, up compared to the $5.061 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 Dec. 11 totaled $10.283 million, up compared to the  $10.058 million collected through Dec. 16, 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