County Finances Healthy Despite Sales Tax Downturn, Officials Say
Last updated Friday, December 28, 2007 8:04 PM CST in News
By Christopher Spencer
THE MORNING NEWS
FAYETTEVILLE -- Washington County collected less sales tax in 2007 for the first time in 25 years, according to county revenue records.
But County Judge Jerry Hunton said the county is still in good fiscal health going into 2008. Washington County saved its money during years of plenty this decade, and, as a result, is in an enviable position.
"We're pretty healthy compared to the general economy right now. We didn't splurge. We didn't jump out on any limbs," he said. "Some of our fellow economic entities did not put money away and that's the only reason some of them are having those issues right now."
County Comptroller Boyd Darling agrees.
The county has about $15 million in reserve and depended much more on property taxes rather than sales tax to fund the $36.8 million budget this year.
The county collected $11.4 million more this year in property taxes compared with 2006. This money is distributed to various jurisdictions according to the millage rates, with the majority going to area school districts. Only a portion of the $11.4 million total goes to the county, and that amount was not available Friday.
The property taxes collected also were closer to the amount projected by the county assessor. The county collected 95 percent of the money projected by the county assessor in 2007, compared with 94 percent in 2006. That means less money is delinquent this year.
While the total dollar amount of property taxes collected rose, the number of people who didn't pay this year is also up, said county collector David Ruff. Most of the delinquent property taxes this year are from those who owe smaller amounts, such as $50 on a used car.
About $6.4 million remains uncollected in property taxes this year, according to county records.
Property tax will continue to become more important than sales tax for the county in the coming years as more population is lost to city annexations, Darling said.
The county gets a percentage of the 1-cent sales tax based on the number of people who live in unincorporated areas of the county, and as that number goes down, the county's share of the sales tax revenue will dwindle.
Sales tax revenue was down for the 13th month in a row in December. November 2006 was the last month an increase occurred in the county's sales tax revenue. The county collected $7.26 million in 2005, $7.47 million in 2006 and $7.13 million in 2007.
Fayetteville and Springdale in Washington County both experienced losses in their sales tax revenue compared with last year. Rogers and Bentonville in Benton County experienced increases in their sales tax money for most of 2007, but in December, sales tax was down from 2006, said Benton County Comptroller Richard McComas.
Benton County's sales tax revenue was down this year, but only because Bella Vista incorporated as a city, McComas said. Overall, sales tax revenue was up in Benton County, he said.
Washington County's 2008 budget makes the assumption that there will be no new revenue next year. No new positions were funded as a result. However, the Quorum Court was able to approve the requests made by each department because the requests were smaller than usual.
"We, the county, the Quorum Court, tend to be pretty conservative in our financial projections," Darling said. The county is in a position of financial strength as a result, he said.
Hunton said he is optimistic about 2008 and expects the nation's financial downturn to at least level out. Hunton said he can't point to statistics to back up his sunny outlook, but people are still moving to Northwest Arkansas and there are still jobs available.
"My feeling is that we are at the bottom of this thing," he said.
THE BREAKDOWN
Sales Tax Slump
Sales tax revenue in Washington County was down $665,885 from last year. This includes a shortfall of $329,002 from the one-fourth-cent sales tax that goes to the Washington County Detention Center, and a drop of $336,883 from the county's portion of the 1-cent sales tax it shares with the cities. Sales tax revenue reported by the county typically reflects sales from two months earlier.
Here's a comparison of the county's portion of the 1-cent sales tax by year:
Month 006 2007 Difference
January $619,105 $572,870 -$46,235
February $719,851 $691,691 -$28,160
March $578,845 $545,340 - $33,505
April $577,873 $555,548 - $22,325
May $647,667 $615,215 - $32,452
June $602,798 $569,744 - $33,054
July $607,423 $597,841 - $9,582
August $645,657 $606,637 - $39,020
September $608,986 $588,882 - $20,104
October $641,465 $609,840 - $31,625
November $621,147 $601,393 - $19,754
December $596,108 $575,041 - $21,067
Total: - $336,883
Source: Staff Report
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