In Fort Smith, Leaders Building A ‘Post-Industrial' World

by Marty Cook  on Monday, Jan. 27, 2014 12:00 am  

Fort Smith Mayor Sandy Sanders held up a newspaper article from early spring of 2013 with a headline that said the mayor was optimistic about his city’s economic future.

“I’m still optimistic,” Sanders said, smiling.

Fort Smith took a hard hit in the recession and lost a bounty of jobs when Whirlpool ceased operations in the city in 2012. There have been a number of job announcements for Fort Smith throughout the past year, but those announcements haven’t helped tax revenue. And declining sales tax receipts have caused some budget constriction.

Now, city leaders and supporters say, Fort Smith is fighting to find its place in a post-industrial world.

Sanders said the drop in sales tax revenue wasn’t a surprise because officials had seen the shaky forecast coming. The city brought in about $1.4 million less than projected in 2013 from city and county sales taxes, he said.

“Spending can be pushed until the next year,” Sanders said. “There are different ways you can address any shortfall. We had seen the trends coming. In April we adjusted the budget at that time so the departments knew we were estimating shortfalls so they began to adjust their spending.”

Sanders said the health of Fort Smith’s economy, like many other local economies, is tied to the national economy. While Sanders said city and business officials are working hard locally to spur growth, some of the city’s challenges are out of Fort Smith’s hands.

“It’s reflective of the nationwide recession,” Sanders said. “With the economy as sluggish as it is, we were very modest in preparing our 2014 budget. At the first quarter, we’ll take a look to see if anything has picked up, has anything improved.

“Our recovery is slower than we would like. It’s going to be pretty steady until the national economy turns around.”

Deputy City Administrator Jeff Dingham said sales tax revenue generates about 60 percent of the city’s operating fund. Tax revenue is still in flux because of the loss of jobs, the decrease in wages from new jobs and tighter spending habits.

“Retail sales are the last piece to recover from recession,” Dingham said. “We’re getting good jobs, but they’re in the $15-$18 [hourly] range instead of the $20-$25 range. We’re doggone glad to have them, but the sustainability of those jobs is more volatile.”

The city is doing what it can to attract new jobs — “We don’t care if it’s one job or 1,000 jobs,” Sanders said — and in late 2013 started a focused “buy local” program. Sanders said if more people bought locally it would help Fort Smith tax revenue.



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