Conway reports three-month sales tax decline signaling economic slowdown

The Conway City Council meeting held on April 10, 2025, focused primarily on the city's sales tax revenue trends and financial outlook for the year. The discussions revealed a concerning pattern of declining sales tax collections over the first three months of 2025, prompting officials to analyze the underlying causes and implications for the city's budget.

City officials reported a 9% decrease in sales tax revenue for January, followed by a 1% drop in February and a 1.8% decline in March. This trend has resulted in a total shortfall of approximately $400,000 compared to the same period last year, with about $300,000 of that affecting the general fund. The analysis of 17 business categories indicated that 12 categories experienced declines in January, 10 in February, and 8 in March, suggesting a gradual improvement in the number of sectors affected.

Key sectors such as lumber wholesalers, electronics and appliance stores, grocery retailers, and hotels consistently reported downturns, raising concerns about the overall economic health of Conway. Notably, while restaurants and auto parts retailers showed resilience, the performance of full-service restaurants was mixed, contributing to the overall uncertainty.

The council also discussed the financial implications of these trends, noting a net expense of $2.2 million in the general fund for March, largely attributed to significant expenditures related to the community center and annual payments for fire truck financing. Other funds, such as the street fund, are expected to face challenges as new facility expenses arise, while sanitation and airport operations remain less affected due to their fee-based structures.

Despite the downturn, officials emphasized that the city is on track with its budgeted sales tax receipts, achieving 25% of the anticipated annual revenue by the end of March. The discussions concluded with a commitment to monitor the situation closely and remain hopeful for a turnaround in April, while acknowledging that broader economic uncertainties may be influencing local trends.

The council plans to keep the community informed as new data becomes available, particularly regarding April's sales tax figures, which will provide further insight into the city's financial trajectory.