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FAYETTEVILLE -- City and county officials say they are surprised but pleased with the most recent monthly reports on revenue from their 1% sales taxes.

The July tax revenue for the four largest cities in Northwest Arkansas -- Fayetteville, Springdale, Rogers and Bentonville -- was essentially flat for three of the cities with only Bentonville showing a substantial difference when compared with July 2019.

Bentonville's sales tax revenue was down 22.88%, showing July sales tax revenue of $1,183,377 compared with July 2019's $1,534,487.

Fayetteville revenue was down 0.78% with $1,910,594 compared with $1,925,708 last July.

Rogers received $1,680,249, a 1.85% decrease from $1,711,976 in July 2019.

Springdale reported the only increase in July, with $1,395,620 compared with $1,388,747, up 0.49%.

Jake Harper, director of Finance and Administration for Bentonville, said his city's monthly sales tax revenue reports tend to fluctuate more than the other cities do, citing rebates to companies. He said the state approved rebates totaling about $150,000 more last month than in July 2019. Without those rebates, he said, the drop would be about 13% instead of nearly 23%.

Harper said he thinks the sales tax will even out over the course of the year. Revenue is up about 4% year-to-date, Harper said.

Fayetteville's Kevin Springer said the sales tax revenue for the year is flat. Springer said the city will continue in a "wait-and-see" mode for the near future to see how the local economy fares.

"We really don't have anything we can compare this against," Springer said.

In Rogers, the slight decrease was a pleasant surprise, according to Casey Wilhelm, the city's director of finance.

"It seems like it didn't really take a hit," Wilhelm said. "I was surprised. The mayor was surprised. We were both expecting it to be more."

Wilhelm said the city is on track to meet this year's budget projection of $19.9 million.

"If we hold steady, we'll hit $20 million," she said.

Wyman Morgan, Springdale's finance director, said sales tax revenue was better than the reported numbers indicate.

"We had a huge refund approved by the state," Morgan said. "It was in excess of $300,000."

Morgan said the state doesn't show details from individual companies but provides a breakdown of sales tax revenue in broad categories. He said the refund came from building supplies and construction-related activity.

"There was a huge credit in building supplies," he said. "If not for that, I think we would have been up even more."

Morgan predicted that the city will end the year between 4% and 5% above what was budgeted for sales tax revenue. He said the city has received about $16 million from its 1% sales tax in past years.

"I think we'll set a record," he said. "We've still got a lot of construction going. It's keeping us afloat."

Benton and Washington counties were split in the trend of their sales tax revenue. Benton County reported a decrease in sales tax for July compared with the same month last year, while Washington County showed an increase.

Brenda Guenther, Benton County comptroller, said the county received $914,623 in sales tax in July 2019 and $903,234 last month, a 1.25% decline.

Guenther said budget projections were reduced in June from $11.4 million to $10.02 million because of the covid-19 pandemic. Without that reduction, she said, the county would be looking at a shortfall in revenue for the year of nearly $500,000. With the budget reduction, Guenther said, the county is on track to exceed the revised revenue projection.

Treasurer Bobby Hill said Washington County's sales tax revenue has remained surprisingly steady. Washington County received $705,048, a 4.22% increase over the $676,470 in July 2019.

Hill said the emergency relief approved by Congress in the spring may have helped in the short term. Hill said with expanded unemployment benefits approved by Congress expiring and future stimulus checks undecided, county officials will remain cautious.

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Local sales tax

The sales tax revenue received by cities and counties in July is money collected on sales in May. The sales tax is collected by merchants and sent after the end of each month to the state Department of Finance and Administration, which calculates the amounts owed to the taxing entities and reimburses them.

Source: Staff report

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