City’s sales tax rally continues; revenues up 9%

The sales tax rally that started in the second quarter continued into the fourth quarter, with October collections of the city’s 1% general fund sales tax sustaining a six-month streak of year-over-year gains.

According to the report the city issued Tuesday, the

$1,265,093 the tax collected in October was 9.05%, or $104,960, more than the previous October. Since posting a $206,846, or

15.91%, drop in April, collections increased $ 570,079, or 7.94%, compared to the May- to- October period in 2019. The

$12,249,381 collected during the first 10 months is $626,986, or

5.39%, more than last year. The tax has outpaced the 2020 revenue forecast by

$668,169, or 5.77%, through 10 months. Collections beat their October projection by $152,098, or 13.67%.

This has been “an unusual year, but our sales tax numbers have prospered in spite of so many challenges,” Finance Director/ Treasurer Dorethea Yates said in an email to the Hot Springs Board of Directors and local business leaders. “These numbers are a good indicator of the strength of leadership and the economy in Hot Springs. If we can overcome the virus, the sky is the limit in 2021.”

While city revenue has increased, the job market has contracted. According to information compiled by the U.S. Bureau of Labor Statistics, the Hot Springs Metropolitan Statistical Area, which includes all of Gar

land County, had 15,900 fewer jobs from April to November than it did last year. The county had 5,800 fewer jobs in April than it did the previous April, and 3,400 fewer jobs in May.

Job loss slowed in the fall, with 700 fewer jobs in October and 500 fewer in November. According to the preliminary report for November, the local economy had 38,800 nonfarm jobs compared to 39,300 in 2019. The 200 jobs gained in January have been the only year-overyear gain posted this year.

The county’s unemployment rate reached 15.6% in April before falling to 7.5% in October, according to the preliminary report for October.

October collections of the

3% sales tax the Hot Springs Advertising and Promotion Commission levies on prepared food and lodging inside the city rose $ 16,698, or 3.12%, the second straight month the tax posted a year-over-year gain. Collections from February to August were

$938,885, or 21%, lower than last year. The $ 5,175,454 collected through 10 months is $798,538, or 13.37%, less than last year.

Through October, the roughly 70 lodging facilities within the commission’s taxing authority collected $326,546, or 22.49%, less than they did last year. The roughly 300 prepared food establishments subject to the tax collected $ 471,992, or 10.44%, less than they did during the first 10 months of last year.

In addition to supporting the Hot Springs Convention Center and promoting the city’s tourism industry, proceeds from the tax service about $9 million in debt the city issued on the commission’s behalf for construction of the Majestic Park baseball complex and the expansion of the Mid-America Science Museum.

The city’s financial adviser has said it costs about $600,000 a year to service both debt issues.