Fort Smith’s revenue from sales tax rises

City’s November collection 15.5% more than year prior

“They’re doing more getting out and shopping, they’re eating, they’re traveling more, just because in the last two years we haven’t been able to that much.”

— Dean Pendergrass, Fort Smith Downtown Business Association director

FORT SMITH — The city’s sales tax collection in November was 15.5% more than in November 2020, at $1.7 million compared to $1.5 million.

City Administrator Carl Geffken said the cumulative increase between November 2019 and November 2021 is 23.44%, with Fort Smith’s sales tax collection only dipping in April and May of 2020 before rebounding and exceeding the prior year’s collection each month.

The current sales tax rate is 6.5% for the state, 2% for the city and 1.25% for Sebastian County.

The city sales tax has 1% used for public safety, library, parks and senior citizens programs, as well as downtown development and projects, public transit and privilege license replacement. The remaining 0.25% goes to the University of Arkansas-Fort Smith.

Fort Smith’s has 1% going to roads, 0.75% to bond payments for sewer projects and 0.25% split between Park and Fire departments for improvement projects.

“It is always positive for any city’s tax collections to trend higher,” Geffken said.

Additional services can be provided and/or reserves increased as long as the trend holds and the city budgets prudently, he said.

The city’s November report states Fort Smith’s cumulative revenue from its share of the county sales tax is roughly $19.2 million, which was collected in the last 11 months. The city’s sales tax revenue in 2020 was roughly $18.3 million, making a 5.3% increase with one month left to report.

Fort Smith’s 1% street program tax generated more than $2.2 million in November, a 14.5% increase from the $1.92 million collected in November 2020. The 0.75% bonds tax collected $1.65 million, and the 0.25% fire and parks tax collected $550,056.

Geffken said city directors have approved prudent budgets over the last six years. He said when revenue is above budget, it allows the city to provide money for projects such as the $5 million runway expansion at Fort Smith Regional Airport.

“I am cautiously optimistic that revenue growth will continue in 2022, but possibly at a more metered pace,” he said.

An increase in sales tax collection also shows a recent increase in sales for the businesses operating within the city.

Dean Pendergrass, Fort Smith Downtown Business Association director, said he thinks it’s great that people are getting out and buying locally. He noted a large portion of that money will continue to circulate through and help improve the community.

“They’re doing more getting out and shopping, they’re eating, they’re traveling more, just because in the last two years we haven’t been able to that much,” he said.