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.
Sales tax revenue for Fort Smith in the city’s August report was up more than 2% and the city’s portion of the countywide tax was up more than 17% – although Fort Smith Finance Director Kara Bushkuhl is not certain the county jump will hold up in subsequent reports.
Each of the city’s 1% sales taxes (1% for streets and 1% for water and sewer projects) collected $1.641 million in the August report, up 2.06% from the same period in 2012. The collections in the August report were 1.02% 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 September are from taxes collected in July and transferred by merchants to the state in August.)
The August report ended four consecutive months of year-over-year declines.
For the first eight reporting months of 2013, each of the 1% sales taxes generated $13.135 million, down 1.09% compared to the same period of 2012, and 4.07% below budget estimates.
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 August report is $1.441 million, up 17.27% compared to August 2012. The collection was up 14.32% compared to the revenue estimate.
Bushkuhl said there could be an error on the August report from the state. If so, the change – likely a reduction – would be reflected in the September report.
“It was very surprising, and we probably need to wait until next month to see if there is a reversal for an error in the deposit of funds,” Bushkuhl said.
For the first eight months of 2013, the countywide tax has generated $10.4 million for Fort Smith, up 0.51% compared to 2012 and down 1.95% 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. A downward trend in the countywide collections has resulted in city officials seeking 4% budget cuts from all departments.
Franchise fees collected by the city through Sept. 24 total $3.111 million, up compared to the $2.948 million collected during the same period of 2012. Property tax collections through Sept. 23 totaled $2.81 million, a gain over the $2.71 million reported during the same period of 2012.
Statewide, tax collections are off to a good start for the fiscal year. Year-to-date gross revenue (July 2013-Aug. 2013) totaled $910.6 million, 2.9% above the same period last year and above forecast by 1.2%, according to the report issued Sept. 4 by the Arkansas Department of Finance and Administration.
Year-to-date sales and use tax collections were $380.5 million, up 6.9% above last year and 2.3% above forecast.
August gross revenue was $443 million, up 4.6% above last year and 1% above forecast. Sales and use tax collections during the month totaled $194.5 million, up 9.3% from last year and 4% above forecast.
PREVIOUS ANNUAL COLLECTION INFO
Fort Smith 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