Sales Tax Revenue Up

FARMINGTON, PRAIRIE GROVE SEE INCREASE

FARMINGTON — Revenue from the 1-cent sales tax collected by the cities of Farmington and Prairie Grove is up for the year, while the city of Lincoln has seen a decline in its local sales tax proceeds.

Lincoln’s 1-cent sales tax revenue is down by 17 percent for January- July, compared to the same period last year, according to information from Chuck Wood, city business manager.

Lincoln collected $143,194 from it 1- cent sales tax for the first seven months of 2012, compared to $ 118,729 for the same period this year, a decline of $24,465. The monthly average has declined from $20,456 in 2012 to $16,961 this year.

Wood said he attributes the revenue decline to several large businesses closing or moving to a new location.

Lincoln collects a 1-cent sales tax for capital improvements and another 1- cent tax for the new library.

Larry Oelrich, director of administrative services and public works, said Prairie Grove’s sales tax revenues are about what he expects.

“We receive about 2 to 3 percent more each year, unless there’s a recession,” Oelrich said.

For Prairie Grove, revenues are up this year, though not by a lot.

For January-July 2012, Prairie Grove took in $229,556 from its 1 percent sales tax. For the same period this year, the city has received $236,470, an increase of $6,914.

Prairie Grove actually levies a 2.25 percent sales tax. Of this, 1 percent is collected to pay back bonds for the sewer plant, .25 percent is designated for parks and libraries, another .25 percent goes into a fund that can be used for any municipal purposes and .75 percent is being collected to pay off the bonds for infrastructure improvements.

Prairie Grove’s biggest month this year was May. Prairie Grove received $ 39,462 for its May payment from the state of Arkansas, compared to $31,682 in May 2012. Sales tax collections are two months behind so the payment received in May represents sales tax revenues collected in March.

Oelrich did not have an explanation for the $8,000 increase from May 2012 to May 2013, other than to say it is probably an “anomaly.”

Farmington collected $ 254,438 from its 1 cent sales tax for January- July, compared to $242,659 for the same period last year, an increase of $11,779.

Farmington collects a 1- cent sales tax for the general and street fund, a 1-cent tax for the Farmington Sports Complex and another 1-cent sales tax for sewer debt service.

Mayor Ernie Penn said Farmington is conservative with its revenue projections.

“We kinda figure about a two to three percent increase a year and that’s what it has been averaging,” Penn said.

He expects, though, that revenues will go up with the opening of the new Gabriela’s restaurant.

“With the opening of Gabby’s, it will help big time, there’s no doubt in my mind,” Penn said.

He said other companies also have contacted the city about the possibility of coming to Farmington.

The county sales tax is up this year, compared to 2012, and that is benefiting all three communities. The county sales tax is distributed to cities based on population.

Lincoln received $197,436 from January-July 2012 from the county sales tax. This year, it has taken in $206,228, an increase of 4.45 percent. Farmington’s county sales tax revenue is up by $23,320 for the year, from $524,509 in 2012 to $547,829 this year. Prairie Grove’s county sales tax revenue has gone from $384,513 in 2012 to $401,655 for the same period this year, an increase of $17,142.