ANOTHER DROP: Sales Tax Revenue Falls

COLLECTIONS STILL MEETING BUDGET PROJECTIONS

By Steve Caraway

Posted: November 26, 2009 at 4:45 a.m.

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SPRINGDALE — Sales tax collection in Springdale tumbled again in the November report.

The collection fell 3.2 percent, from $848,677 in 2008 to $821,537 in 2009.

Springdale’s collection has fallen every month except two since November 2006. The two positive months, in February 2009 and April 2009, bracketed a fall of 12.4 percent.

“It’s not good, but it could have been worse,” said Mayor Doug Sprouse. “I hope it’s starting to level out.”

Sales tax revenue reported in November reflects sales in September. Businesses collecting taxes send the money to the state in the month following the collection, with the state remitting money to governmental entities the following month.

Springdale businesses charge a 2 percent city sales tax. One percent goes to pay off bonds that fi nances the city street program and Arvest Ballpark. The other percent is split between the general fund and the capital improvement program fund.

Through the end of December, the capital improvement program will receive 75 percent of the collection, with the general fund 25 percent. The City Council approved a change in its 2010 city budget and the split will go to 50-50 starting in January.

“It will start with the money we receive in January,” said Jeff Harper, city attorney.

The city budget for 2009 refl ected a continued fall in sales tax, said Wyman Morgan, city director for fi nance and administration.

“We will still be in line with what we projected,” Morgan said.

The 2009 budget planned on $2.6 million in revenue from city sales tax. The actual city sales tax revenue, with the final month estimated, is expected to meet the projection.

The experience with three years of falling tax revenue could put Springdale ahead of other area cities in coping with the decline, Morgan said.

“We’ve already made our big cuts and prepared for falling revenues,” Morgan said.

Fayetteville, Rogers and Bentonville tax revenue also fell for the month, with a double-digit decline in the Benton County cities.

“I think this is a reflection of the national economy,” Sprouse said. “Hopefully, we’ve seen the worst. We have seen some signs of improving real estate sales, but it’s still a delicate balance.”

Fayetteville’s collection fell 3.92 percent, from $1.35 million to $1.3 million. Rogers collection dropped 15.8 percent, from $1.11 million to $0.94 million. Bentonville fell 15.3 percent, from $789,843 to $668.914.

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