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Conway officials warn sales-tax decline strains city budget; May uptick eases pressure
Summary
City finance staff told the Conway City Council that sales tax—a major revenue source—has been down for months but showed a 4.7% increase in the latest report; council discussed spending and hiring freezes and directed department-level audits to limit cuts to personnel.
Conway finance staff reported mixed sales-tax results to the Conway City Council on the evening of June 10, 2025, saying the city’s sales-tax receipts remain weaker than a year ago overall but that the most recent state report showed a 4.7% increase compared with the same period last year.
The report matters because sales tax is Conway’s single largest revenue source: staff said sales tax represents about 60% of the general fund and roughly 47% of total city revenues. City officials told the council that even small monthly swings can have large budgetary effects and that the city is still working to steady receipts after several months of declines.
Finance staff member Tyler Wenningham presented the figures and called attention to both short-term and structural trends. “This month, it was down 1.7%, putting us down at 3.2 year to date. After the number we got today being up 4.7, I think we’re down only 1.9,” Wenningham said, summarizing May results and the year-to-date position. He also flagged that detailed breakdowns by industry (NAICS codes) lag behind the state’s aggregate numbers, so the city cannot yet fully identify which sectors are driving gains or declines.
Wenningham and other staff walked the council through a monthly and multi-month comparison of 17 business categories the city tracks. They said electronic shopping (internet sales) had been a strong contributor in recent months, while categories such as restaurants and general merchandise fluctuate and some large rebates reported by other cities can distort one-month comparisons. Wenningham noted an example in the data: “They had a large rebate. A $115,000 rebate was claimed in that category for that month,” when council members asked whether a jump in software-publishing receipts was accurate.
Council members and the mayor stressed the city must avoid cutting essential services. The mayor and staff described steps already taken: a spending freeze earlier in the year that remains in place, department-level internal audits to identify nonessential expenses, and a hiring freeze with exceptions for police, fire and seasonal aquatic positions. The mayor said the administration would continue to seek additional cuts that do not require reducing personnel.
Councilors placed the financial report on the consent calendar for approval; a subsequent motion to accept the May financials passed 8-0.
Looking ahead, staff said the city will continue monitoring state reports (which typically report sales several weeks after the underlying month) and follow up with more detailed NAICS-code analysis as it becomes available. They warned that if the modest upturn does not persist, the city may need to consider deeper adjustments, and that because roughly 82% of the budget is personnel costs, most near-term savings options are limited without affecting staffing levels.
The council directed staff to continue department audits and said an ordinance or further budget action would be used if the trend worsened.
