ROGERS — May, traditionally a good month for sales tax revenue, didn’t disappoint three city financial officers, as revenue exceeded expectation. Springdale revenue, however, continued a downward trend.
Sales tax revenue received in May reflects March taxes collected in April. Comparisons are based on collection from the same month in the previous year.
Each of the four cities collects a 2 percent sales tax. One percent is devoted to repayment of bonds. The other 1 percent goes into each city’s general fund and is available for operations. For the purpose of this report, Northwest Arkansas Newspapers tracks the 1 percent going into the general fund.
Rogers received $1,046,670 for May compared to $1,018,579 for the same period last year, an increase of $28,090 or 2.8 percent. Rogers, as do many other cities, often sees an increase in revenue in May.
“I think people have been inside for a couple of months and when the weather begins to clear, people have a pent up demand. They act on that demand by spending a few more dollars than they spent the previous two months,” said Jerry Hudlow, Rogers treasurer.
Hudlow said he is pleased with the increase in revenue for the month and, more importantly, the upward trend he has seen for the past eight months.
“We’ve been up 11 of the last 12 month and up steadily for the past eight months. We are growing at 2 percent a year. That’s low compared to the early part of this century when we were seeing sales tax revenue grow a constant 7 percent to 8 percent,” Hudlow said. A 2 percent to 3 percent growth is a normal growth rate of a financially sound municipality, he said.
“We’ve returned to normal and that’s OK. I suspect when the economy picks up again we will see slightly higher sales tax revenue, although I don’t know if we will see the unbelievable increases we saw for a few years,” Hudlow said, adding he didn’t think that kind of massive growth is sustainable for long.
Fayetteville’s sales tax revenue increased 4.5 percent compared to last year. The city received $1,405,632, compared to $1,344,674 for May last year, an increase of $60,958.
Paul Becker, Fayetteville finance director, said Tuesday he is pleased with the increase.
“We are doing OK. We are up about 2.5 percent for the first four months of the year and up 3.2 percent for the general fund budget. I’ll take that,” Becker said. The general fund budget also includes county sales tax revenue the city receives.
Becker agreed with Hudlow that May is normally a good revenue month.
“I think for us it’s the students. January and February are cold and we usually have some bad weather. When the skies clear, the students want to get out and they spend a little more money. At least that’s my theory, Becker said.
Bentonville’s revenue took a two-digit jump from the previous year. The city received $773,191 compared to $665,629 last year an increase of $107,532 or 16 percent.
Denise Land, Bentonville finance director, said she’s pleased with the increase, but it is how the annual city budget looks that keeps her interest.
“For the first four months of the year, we are tracking on budget. We are predicting a 2 percent to 3 percent growth this year. For the previous two years, we didn’t plan for any sale tax revenue growth, we predicted a flat budget. This year we built in a little growth. Right now we’re up 2 percent for the year and I have no complaints,” Land said.
Springdale took a slight tumble this year compared to last year. The city received $847,109 this year and $852,501 for the same period last year a drop of $5,392 or -0.6 percent.
Wyman Morgan, Springdale administration and financial service director, said the city budget is still fine, because of the county sales tax the city receives.
As he has said over the past several months, Springdale’s budget is conservative this year and is on track.