November report shows a dip in Fort Smith sales tax revenue

Fort Smith sales tax revenue dipped slightly in the November report compared to November 2024, with the city’s share of the Sebastian County 1% tax down 2.5% below the budget estimate. But the tally prior to a rebate suggests “stronger” consumer spending, according to the city.

The November numbers were posted Monday (Dec. 29) by the city. Sales tax revenue numbers are provided monthly to Arkansas cities and counties by the Arkansas Department of Finance and Administration.

The city’s share of the Sebastian County sales tax was $1.985 million, down 1.4% compared to $2.013 million reported in November 2024, according to the city’s sales tax report. The November county tax share, which measures October’s transactions, was down 2.5% from the city’s budget estimate for November.

The year-to-date countywide tax total for Fort Smith is $22.421 million, down 0.11% from the $22.445 million generated through November 2024. The tax brought in $24.492 million in 2024, 0.95% lower than 2023.

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 Fort Smith Board of Directors recently approved a 2026 budget that included almost $17 million in reductions from the initial proposed budget. The largest part of $16.904 million in reductions to the city’s general fund, water and sewer fund, solid waste fund, and streets and maintenance fund came from removal of 71 now-vacant jobs. The job cuts are estimated to reduce the budget by $4.226 million.

The 1% city sales tax generated $2.365 million in November, down 3% from the $2.438 million in November 2024. The tax provided $1.478 million for streets, bridges and drainage and $887,043 for federal consent decree work required to make sewer system improvements.

For the first 11 reporting months of 2025, the tax generated $27.011 million, down 0.03% compared with the $27.019 million in the same period of 2024. That tax brought in $29.516 million in 2024, down 1.4% compared with 2023 revenue.

The gross tax receipts prior to reductions from rebates were better than the past three years, according to comments received from Acting City Administrator Jeff Dingman. The November gross receipts totaled $5.343 million, better than the $5.142 million in November 2024, the $5.097 million in November 2023, and the $5.034 million in November 2022.

“The gross sales tax receipts indicate that consumer spending was stronger this November than it was in November the previous three years,” Dingman said. “Assuming we won’t have a similar rebate month in December, we should end the year very close to the projected sales tax revenue for 2025.”

Fort Smith voters in May approved a sales tax reallocation plan to provide $360 million over 30 years to fund federally-mandated sewer system work. The vote reallocated a 0.75% sales tax first approved by voters in 2022 to pay for consent decree work and to pay bonds, with 0.125% used for the Fort Smith Police Department. It also renewed the 1% street tax but reallocated 0.625% for streets, bridges and drainage work, with the remainder of the tax to fund consent decree work and bonds.

PREVIOUS ANNUAL COLLECTION INFO
Fort Smith 1% sales tax collection for streets
2024: $29.51 million
2023: $29.92 million
2022: $28.65 million
2021: $26.66 million
2020: $22.66 million
2019: $21.73 million
2018: $21.5 million

Fort Smith portion of 1% Sebastian County sales tax
2024: $24.49 million
2023: $24.64 million
2022: $23.55 million
2021: $21.49 million
2020: $18.24 million
2019: $17.26 million
2018: $17.04 million
2017: $16.69 million