Fayetteville Sales Tax Collection Up After Year Of Dismal Figures
Official Says Only Cautious Optimism Warranted
Last updated Wednesday, January 2, 2008 8:18 PM CST in News
By Dug Begley
THE MORNING NEWS
FAYETTEVILLE -- An uptick in sales tax collection is reason to rejoice, but not a reason to think Fayetteville's fiscal woes are a thing of the past, the city's finance director said Wednesday.
"I'm hoping that we are bottoming out and I have a feeling that we are, but I can't say that with any certainty," Paul Becker said.
Becker told the Fayetteville City Council last week October sales tax revenue -- representing taxes collected in the city in October, calculated by the state in November and distributed to the city in December -- were 3.8 percent above 2006 collections. It's the first time the city received good news on the sales tax front in more than a year, after 12 months of decreased collection.
Becker noted the approximately $1.3 million in sales tax revenue the city received and Fayetteville's share of Washington County's sales tax remained below budget estimates. He said in a memo to the City Council the city was more than $209,000 below budget expectations and $1.7 million behind for the 11 months of fiscal 2007 already collected.
Fayetteville's increase comes at a time when the three other major cities in Northwest Arkansas -- Bentonville, Rogers and Springdale -- experienced decreases, Becker said. That makes Fayetteville's slight increase all the more important, he added.
"The entire region's sales were down substantially," Becker said.
Benton and Washington County both registered less sales tax revenue than 2006, according to state figures complied by Becker.
He noted Fayetteville's fortunate figures might be an anomaly. The annual Bikes, Blues & BBQ motorcycle festival was held in September 2006, but moved to early October last year. Becker said shifting the festival to October might have buoyed the 2007 figures and hurt September comparisons between 2006 and 2007.
The opening of a Sam's Club and Malco theater in Fayetteville might also have helped, Becker said. He stressed one month of improved revenue isn't enough to notice a pattern or determine why the increase occurred.
"What this tells me is I think I'm on track," Becker said, referring to his forecast of modest increases in sales tax collections in 2008.
He said November numbers, expected at the end of January, will shed more light on Fayetteville's fiscal future.
Local retailers said the recent sales figures could indicate shoppers are returning to a buying mood. Jesse Smyers, owner of Lacuna Modern Interiors on College Avenue, said he is optimistic solid sales will continue.
Teresa Griffith said the store she works at, Melody's Choices in the Northwest Arkansas Mall, had a "good" Christmas sales season. Griffith said the real test will be the coming month.
"It's wait-and-see time," Griffith said. "January is always the slowest."
AT A GLANCE
City Collections
Fayetteville's sales tax collections rebounded in October, but remain well below budget estimates for 2007. For the year, the city is now $1.72 million below what it expected to receive in sales tax revenue. Fayetteville bucked a downward trend for the four major cities in Northwest Arkansas, according to state figures for October, released last month.
2006 2007 Difference
City October October Difference Percentage
Bentonville $623,606 $568,378 -$55,228 -8.86
Fayetteville $1,261,354 $1,309,271 $47,918 3.8
Rogers $971,998 $912,583 -$59,415 -6.11
Springdale $970,968 $910,842 -$59,925 -6.17
Source: Fayetteville Finance Division
BY THE NUMBERS
County Collections Short
For Benton and Washington counties, sales tax collections were down in October, despite an increase in Fayetteville sales tax collection.
2006 2007 Difference
County October October Difference Percentage
Benton $2,607,729 $2,373,275 -$234,454 -8.99
Washington $2,504,608 $2,438,241 -$66,367 -2.65
Total $5,112,337 $4,811,516 -$300,821 -5.88
Source: Fayetteville Finance Division
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