Editor’s note: This story is a component of The Compass Report. The quarterly Compass Report is managed by The City Wire and presented by Fort Smith-based Benefit Bank. Other supporting sponsors of The Compass Report are Cox Communications and the Fort Smith Regional Chamber of Commerce.
Fort Smith sales tax revenue was down almost 3.5% in the July report, marking four consecutive months of year-over-year declines in city collections and the city’s portion of the countywide sales tax.
Each of the city’s 1% sales taxes (1% for streets and 1% for water and sewer projects) collected $1.614 million in the July report, down 3.49% from the same period in 2012, and 6.34% below 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 August are from taxes collected in June and transferred by merchants to the state in July.)
For the first seven reporting months of 2013, each of the 1% sales taxes generated $11.494 million, down 1.63% compared to the same period of 2012, and 4.49% below the budget estimate.
Collections in 2012 of the two 1% taxes totaled $39.21 million, slightly ahead of the $38.683 million during 2011. The 2011 collections were 3.9% above 2010 collections.
Fort Smith’s share of the county 1% sales tax in the July report is $1.279 million, down just 0.18% compared to July 2012. The collection was down 2.64% compared to the revenue estimate.
For the first seven reporting months of 2013, the countywide tax has generated $8.958 million for Fort Smith, down 1.75% compared to 2012 and down 4.15% compared to budget forecasts.
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. The dip in collections has resulted in city officials seeking 4% budget cuts from all departments.
Fort Smith’s July report is counter to the overall Arkansas report for July. July sales and use tax collections totaled $186 million, an increase of $8.1 million or 4.5% from last year. Collections were also above monthly forecast levels by $1 million or 0.5%.
PREVIOUS ANNUAL COLLECTION INFO
2% sales tax collection (1% for streets; 1% for water/sewer bonds)
2012: $39.210 million
2011: $38.683 million
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
2012: $15.279 million
2011: $15.15 million
2010: $14.89 million
2009: $15.04 million
2008: $16.61 million
2007: $15.15 million
2006: $14.71 million