City doesn't see sharp drop in March collections

Hot Springs National Park Ranger Katy Foster shows two visitors a map of trails from the porch of the Fordyce Bath House on Saturday. Foster said that by noon on Saturday she had counted a few hundred visitors on the porch. On Friday, around 500 people visited the porch. - Photo by Tanner Newton of The Sentinel-Record
Hot Springs National Park Ranger Katy Foster shows two visitors a map of trails from the porch of the Fordyce Bath House on Saturday. Foster said that by noon on Saturday she had counted a few hundred visitors on the porch. On Friday, around 500 people visited the porch. - Photo by Tanner Newton of The Sentinel-Record

The sharp drop the city of Hot Springs expected in March collections of its sales tax proved more negligible than significant, falling 1.09% compared to last March.

The $1,196,383 the city reported in collections of its 1% general fund sales tax was $13,162 less than the previous March, allowing the city to breathe a sigh of relief.

"Needless to say, this is much better than I expected," Finance Director/Treasurer Dorethea Yates said in an email to the Hot Springs Board of Directors and city business leaders. "We'll take it."

First quarter collections are up 8.39%, or $263,754, on the strength of 9.71% and 19.01% increases in January and February. The 1% tax collected $3,408,483 through the first three months. It raised $14,259,888 last year. The 2020 budget the city board adopted last year projected $14,070,359 in revenue from the 1% tax.

March missed the $1,265,217 budget projection by 5.44%, or $68,834, but first quarter collections outpaced the revenue forecast by 1.70%, or $57,200.

City Manager Bill Burrough wrote a letter earlier this month to state Sen. Bill Sample, R-District 14, of Garland County, requesting legislation requiring more timely and detailed reporting from the state revenue agency. The 60-day lag from when local sales taxes are collected to when the agency remits them to cities and counties makes it difficult to forecast revenue and adjust budgets.

"Obviously this news highlights the level of uncertainty that exists in the information that (Department of Finance and Administration) provides to local governments," Deputy City Manager Lance Spicer, referring to the better than expected March report, said in an email Friday to the city board and business leaders. "It also further reinforces the need for more timely and detailed sales tax information reporting and the required amendments to state statutes to bring about this much-needed change."

March collections of the 0.50% countywide sales tax Garland County levies in support of its general and solid waste funds were up 0.53%, or $4,503, from last year, realizing $847,330.

"It was amazingly good news," County Judge Darryl Mahoney said Friday. "It appeared to be almost the same, maybe just a tad more than what we collected in March of last year. And we did without the St. Patrick's Day parade. We did without a lot of stuff.

"That tells me two things. One, Garland County and Hot Springs were headed for an unbelievable year, because the first half of the month produced as much sales tax as the whole month did last year. The second part is there was still quite a bit of spending going on at a local level even without the events happening.

"It's good us for us, because of essential services we have to provide. We still have a lot of businesses that suffered through it, and we're going to make sure we do all we can to try and help them."

Unlike this time last year, online retailers and e-commerce facilitators such as Amazon and eBay are required to collect state and local sales taxes in Arkansas. The mandate took effect last July. Collections of the city's 1% sales tax grew 11.41%, or $785,610, compared to the last six months of 2018 and beat the annual revenue forecast by 4.80%, or $653,111.

The March report for the 3% sales tax the Hot Springs Advertising and Promotion Commission levies on prepared food and lodging inside the city was unavailable Friday.

Local on 05/24/2020

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