Northwest Arkansas municipalities see strong sales tax revenue

FAYETTEVILLE -- Sales tax revenue remains strong in Northwest Arkansas and one local business owner says the covid-19 pandemic had little effect on his shop.

Wade Ogle, owner of Block Street Records in Fayetteville, said the first few months of the pandemic, starting in March 2020, were difficult because the shop was closed to customers like many other small businesses.

"Those first couple of months it was tough," Ogle said. "We had to go to a curbside service where I would carry orders out to people. For those first two months, I was the only person in the building."

Ogle said once the restrictions on people being allowed in businesses were eased, things started to return to normal. He said he initially had a velvet rope at the front door like those used at trendy nightclubs or restaurants and people waited outside until admitted by the staff. He said he and the staff have also followed the recommendations for wearing masks and his customers also have complied.

Now, Ogle said, he and his staff are fully vaccinated but still wear masks inside the business. The volume of customers picked up rapidly after the shop physically opened, mostly because of the nature of the business, he said.

"The first couple of months we struggled at times, but we were able to make it work," Ogle said. Gesturing to the records and other items that fill the shop, he said the way people experience music kept his business going.

"This," he said. "This is something you can do in solitude and at home. We all know it. We're just plain lucky."

"Overall, everybody's doing good," said Casey Wilhelm, finance director for Rogers. "No one is hurting in sales tax revenue in Northwest Arkansas."

Three of Northwest Arkansas' four largest cities and both Benton and Washington counties reported substantial growth in revenue from their 1% sales tax. Tax revenue received in September comes from sales in July.

Benton County showed a 9.7% increase with revenue of $1.2 million compared with $1.1 million in June 2020. Washington County increased about 13% with $853,000 in revenue compared with $754,000 last year.

Fayetteville increased about 15% with revenue of $2.3 million compared with $2 million in the same month last year. Springdale increased by about 10%, with $1.7 million in revenue compared with $1.6 million.

Rogers showed a 17% increase, with $2 million in revenue compared with $1.7 million.

Bentonville reported the only drop in revenue for the month, decreasing 4%, with $1.8 million in revenue compared with $1.9 million.

Jake Harper, Bentonville's finance director, said the month-to-month fluctuations aren't unusual in Bentonville because the city frequently has to account for sales tax rebates for large companies. Harper said the city's sales tax revenue was up in substantially in September 2020, rising nearly $500,000 from September 2019, so that also skews the month-to-month comparison. Harper said September 2021 was still a strong month.

"This is the seventh highest month we've ever had," he said. "September 2020 was, at that time, the second highest month we had ever had, so our comparable is for a month that was a really high month for us. The numbers themselves are phenomenal."

Paul Becker, chief financial officer for Fayetteville, said the city's sales tax growth for the month was driven by increasing sales in big box stores and restaurants. The state provides information on sales tax revenue in broad categories of businesses, but not for individual businesses.

Becker said the city's revenue has continued to grow throughout the pandemic, beginning in March 2020. He said he's still cautious with the city budget process.

"I've been saying for 18 months this can't continue, but it has," Becker said. "Sooner or later, it's going to level off, and we're prepared for that."

Bobby Hill, Washington County treasurer, said the county's sales tax revenue has also grown throughout the pandemic, but the 2020 census results will be final next month and contribute to a drop in revenue for the county. The county sales tax revenue is shared with cities on a per capita basis.

Hill said the county's share has been about 18.4% of the revenue, and that is expected to drop to about 16.5%. Brenda Peacock, Benton County comptroller, estimated a similar drop in revenue for Benton County, with the county's share dropping from about 19.9% to about 16.9%.