City, county officials happy with revenue from 1% sales tax

FAYETTEVILLE — City and county officials say they are surprised but pleased with the most recent monthly reports on revenue from their 1% sales taxes.

The July 2020 tax revenue for the four largest cities in Northwest Arkansas — Fayetteville, Springdale, Rogers and Bentonville — was essentially flat for three of the cities with only Bentonville showing a substantial difference when compared to July 2019.

Bentonville’s sales tax revenue was down 22.88%, showing July 2020 sales tax revenue of $1,183,377 compared to July 2019’s $1,534,487.

Fayetteville was down 0.78% with $1,910,594 compared to $1,925,708 last July.

Rogers received $1,680,249, a 1.85% decrease from $1,711,976 in July 2019.

Springdale reported the only increase in July, with $1,395,620 compared to $1,388,747, up 0.49%.

Jake Harper, director of Finance and Administration for Bentonville, said his city’s monthly sales tax revenue reports tend to fluctuate more than the other cities, citing rebates to companies. He said the state approved rebates totalling about $150,000 more last month than in July 2019.

Without those rebates, he said, the drop would be about 13% instead of nearly 23%.

Harper said he thinks the sales tax will even out over the course of the year. Revenue is up about 4% year-todate, Harper said.

Kevin Springer, with Fayetteville, said the sales tax revenue for the year is flat. Springer said the city will continue in a “wait-and-see” mode for the near future to see how the local economy fares.

“We really don’t have anything we can compare this against,” Springer said.

In Rogers, the slight decrease was a pleasant surprise, according to Casey Wilhelm, the city’s director of finance.

“It seems like it didn’t really take a hit,” Wilhelm said. “I was surprised. The mayor was surprised. We were both expecting it to be more.”

Wilhelm said the city is on track to meet this year’s budget projection of $19.9 million.

“If we hold steady, we’ll hit $20 million,” she said.

Wyman Morgan, Springdale’s finance director, said sales tax revenue was better than the reported numbers indicate.

“We had a huge refund approved by the state,” Morgan said. “It was in excess of $300,000.”

Morgan said the state doesn’t show details from individual companies but provides a breakdown of sales tax revenue in broad categories. He said the refund came from building supplies and construction-related activity.

“There was a huge credit in building supplies,” he said. “If not for that, I think we would have been up even more.”

Morgan predicted the city will end the year between 4% and 5% above what was budgeted for sales tax revenue. He said the city has received about $16 million from its 1% sales tax in past years.

“I think we’ll set a record,” he said. “We’ve still got a lot of construction going. It’s keeping us afloat.”

Benton and Washington counties were split in the trend of their sales tax revenue. Benton County reported a decrease in sales tax for July compared to the same month last year Washington County showed an increase.

Brenda Guenther, Benton County comptroller, said the county received $914,623 in sales tax in July 2019 and $903,234 last month, a 1.25% decline.

Guenther said budget projections were reduced in June from $11.4 million to $10.02 million because of the covid-19 pandemic. Without that reduction, she said, the county would be looking at a shortfall in revenue for the year of nearly $500,000. With the budget reduction, Guenther said, the county is on track to exceed the revised revenue projection.

Treasurer Bobby Hill said Washington County’s sales tax revenue has remained surprisingly steady. Washington County received $705,048, a 4.22% increase over the $676,470 in July 2019.

Hill said the emergency relief approved by Congress in the spring may have helped in the short term. Hill said with expanded unemployment benefits approved by Congress expiring this week and future stimulus checks undecided, county officials will remain cautious.

“I’m pleasantly surprised,” Hill said. “A lot of people thought it would be down considerably. You have to consider the stimulus checks that went out. This report is for May, which is about the time a lot of those checks were sent out. What you have to consider is are these numbers artificially higher because of the stimulus or is the economy doing better?”