Consumer spending in area continues decline

Fort Smith and Sebastian County consumer spending continues fall, with Fort Smith sales taxes collected in February down 6.25%.

Collections one each of the city’s 1% sales taxes totaled $1.429 million in the March report, compared to $1.525 million for the same period of 2009. These receipts represent actual tax for February 2010 but are reflected as March 2010 receipts on the city report. (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 March are from taxes collected in January and transferred by merchants to the state in February. However, the city records the March remittance from the state of taxes collected in January on its February report.)

For the first three months of city reports, the city has collected $4.617 million on each tax, down 6.7% from the same period in 2009 and is down the same percentage from budget estimates. The collections are also down 8.9% from the $5.073 million collected in the same period of 2008.

The city’s portion of the countywide 1% sales tax was $1.160 million, down 4.8% from the $1.22 million collected in the 2009 period. For the first three reporting months of 2010, the tax generated $3.741 million, down 5.39% compared to 2009 and down 7.1% compared to 2008.

Revenues from the countywide tax are critical because they account for about 40% of the city’s general fund budget, which is the fund that supports police, fire and other critical city services.

“For the first three months of 2010, the (countywide) tax is $213,163 or 5.39% less than last year when compared to actual receipts and it is $188,083 or 4.79% less when compared to the revised budget for the first three months of 2010,” City Finance Director noted in a memo to the city board and city staff.

• PAST FIVE MONTHS
Countywide sales tax collection
March 2010: $1.16 million
February 2010: $1.14 million
January 2010: $1.439 million
December 2009: $1.156 million
November 2009: $1.048 million

Fort Smith sales tax collection
March 2010: $1.429 million
February 2010: $1.398 million
January 2010: $1.789 million
December 2009: $1.446 million
November 2009: $1.409 million

• 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