Editor’s note: This story is a component of The Compass Report. The quarterly Compass Report is managed by The City Wire, and sponsored by Arvest Bank. Supporting sponsors of The Compass Report are Cox Communications and the Fort Smith Regional Chamber of Commerce.
City and countywide sales tax revenue has improved in recent months, but is struggling to meet or exceed budget estimates. The city's sales taxes (1% for streets and 1% combined for water and sewer projects and fire and parks and recreation) collected $3.363 million in the October report. The figure is 4.76% above October 2013 and 2.27% ahead of budget projections for the month of October.
For the first 10 reporting months of the year, the total tax collections including the October report from the city's sales tax collections are up 2.21% but below budget projections by 0.22%. (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 October are from taxes collected in August and transferred by merchants to the state in September.)
Collections so far in the 2014 reporting period of the city's sales taxes were $33.45 million, up from collections of $32.726 million during the same period in 2013. The same 10 months in 2012 saw collections of $33.064 million. The city sales tax for fire and parks did not begin collecting revenues until 2012.
Total collections of the Fort Smith city sales taxes in 2013 was $38.938. Collections in 2012 totaled $39.21 million, just ahead of the $38.684 million collected in 2011. The 2011 collections were 3.9% above the 2010 revenues of $37.23 million.
Fort Smith's share of the countywide sales tax in the October report was $1.323 million, which was an increase of 6.01% over $1.248 million in October 2013. The figure was also 5.51% above the budget estimate.
The countywide tax collection is critical because the revenue is a little more than 40% of the city’s general fund operating budget of roughly $48 million. A majority of the general fund budget supports fire, police and other critical city functions. The dip in collections compared to budget estimates has resulted in city officials seeking 4% budget cuts from all departments.
The countywide tax generated $15.353 million for Fort Smith during 2013, up 0.49% compared to 2012 and down 1.99% compared to budget forecasts. The countywide tax generated $15.279 million in 2012, just ahead of the $15.15 million in 2011, but lower than the peak collection of $16.61 million in 2008.
The Fort Smith Board of Directors is expected to conduct a third review of the 2015 during a Tuesday night (Nov. 25) meeting. Public hearing and adoption of the budget is set for 6 p.m., Dec. 6, at the Fort Smith School Service Center.
Board members and city staff have proposed various methods to balance the budget while also providing cost-of-living raises for employees and meeting a potential shortfall in a pension fund for police and fire department employees.
PREVIOUS ANNUAL COLLECTION INFO
Fort Smith 2% sales tax collection (1% for streets; 1% for water/sewer bonds)
2013: $38.937 million
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
2013: $15.353 million
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