Officials Brace For Decreases In Sales Tax Revenue

Fort Smith, Sebastian County see pandemic as manageable.

Officials brace for decreases in sales tax revenue

FORT SMITH — Officials from both Fort Smith and Sebastian County are unsure exactly what effect the coronavirus pandemic will have on sales tax revenue.

The uncertainty comes after Gov. Asa Hutchinson ordered the closure of all bars and restaurant dining rooms in the state March 19 and the Arkansas Department of Health ordered the closure of beauty parlors, barbershops, nail salons, massage therapy studios and tattoo parlors as of March 25.

Fort Smith City Administrator Carl Geffken said in a recent interview that the city will not know the real impact until May at the earliest, although it can make projections. This is due to a lag from the locations that collect the sales tax and submit it to the Arkansas Department of Finance and Administration.

Similarly, Sebastian County Judge David Hudson said he could not determine the actual financial impact of the pandemic at this point.

Geffken said Fort Smith has not yet done a month-by-month projection.

“The problem with us trying to project our own sales taxes at this point is that there’s not enough solid information for which to base that projection,” Geffken said Thursday.

“However, there has been some information put out by the Arkansas State Chamber [of Commerce], the [Sam M.] Walton School of Business, and the Arkansas Economic Development Institute that we are using to help guide us at the moment, and we are looking to have some forecasting done for us.”

Fort Smith has looked at how much it can reduce its expenses, Geffken said. He asked every city department to submit a “budget reduction exercise” in the amount of 10% by March 24. Geffken, city Finance Director Andrew Richards and Deputy City Administrator Jeff Dingman are reviewing this material, which will be presented to the city board of directors at a future date.

To read the full article on the Arkansas Democrat-Gazette website click here.