Fort Smith sales tax revenue up more than 6% through August

Fort Smith sales tax revenues continue to show growth over 2022, and a strong year for the region. The city’s share of the Sebastian County tax was up almost 4.5% compared with August 2022. August numbers reflect June’s transactions.

The August sales tax report shows the city’s share of the 1% Sebastian County sales tax totaled $2.129 million, up 4.41% compared to the $2.007 million reported in August 2022. The city estimated the revenue generated by the tax for the month would be $2.039 million, which means the collection came in 4.35% higher than budgeted.

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 first eight months of 2023 showed revenue from the tax at $16.545 million, 6.3% higher than the $15.568 million the tax reported through August 2022.

Sebastian County voters renewed the tax, which generated $33.768 million in 2022, for another 10 years in a special election Aug. 8.

“We are still seeing growth over 2022, which was a record breaking year, so this is a positive report,” said City Director Neal Martin. “We’ll continue to manage our spending well, as we’ve done over the past few years. Overall, we are seeing positive growth and still speaks to the strength of the Fort Smith economy.”

Fort Smith’s 1% street tax – used for maintenance and new construction on streets, bridges and drainage – reported $2.529 million, up 1.94% from the $2.48 million reported in August 2022. The city budgeted the same amount the tax produced in revenue for 2022 for the 2023 budget. Through August, the tax has generated $20.096 million, 5.4% more than the $19.072 million reported in the first eight months of 2022.

“This month’s sales tax collections are trending similarly to the past several months, and I believe they will remain that way for the next several months,” said City Administrator Carl Geffken. “Once interest rate increases cease and the Federal Reserve feels that inflation is under control, we should begin to see interest rate decreases that will energize the economy, resulting in higher sales tax collections. We will also experience the growth associated with the FMS project that will increase sales tax collections independent of interest rates.”

In 2022, Fort Smith’s share of the 1% Sebastian County sales tax was $23.553 million, 9.6% higher than 2021 and up 9.05% from budget estimates for the year. The 2022 total was $1.955 million more than city officials budgeted to spend within the fund budget and $2.06 million, more than the tax brought the city in 2021. The 1% street tax generated $28.85 million, up 7.4% over 2021 and up 7.65% from budget estimates. The 2022 total was $2.05 million more than city officials budgeted to spend on the street tax program.

PREVIOUS ANNUAL COLLECTION INFO
Fort Smith 1% sales tax collection for streets
2022: $28.85 million
2021: $26.667 million
2020: $22.66 million
2019: $21.73 million
2018: $21.503 million
2017: $21.204 million
2016: $21.156 million

Fort Smith portion of 1% countywide sales tax
2022: $23.553 million
2021: $21.49 million
2020: $18.246 million
2019: $17.265 million
2018: $17.043 million
2017: $16.691 million
2016: $16.58 million